Informal Credit Acquisition and Utilization among Home-Grown Rice Marketers in Agricultural Zone C, Kogi State, Nigeria

This study examined informal credit acquisition and utilisation among home-grown rice marketers in Agricultural Zone C, Kogi State, Nigeria. A multistage sampling procedure was used to select 150 home-grown rice marketers, and data were collected using a well-structured questionnaire. Descriptive statistics, gross margin analysis and binary logistic regression were employed for data analysis. The results showed that 65.3% of respondents were female, 68.0% were married and 38.7% had secondary education. The mean marketing experience was 11 years. The study showed that all (100.0%) of the respondents accessed and utilised informal credit for home-grown rice marketing and family needs. Reported sources of informal credit included friends and family (48.0%), Esusu or contribution groups (42.7%), marketers’ associations (38.7%) and cooperative societies (36.0%). The informal credit was used principally for purchasing rice (93.4%) and for other purposes. The average monthly gross margin was ₦376,200, while the net profit was ₦231,850, with a benefit–cost ratio of 1.20. The reported regression results indicated that informal credit utilisation was influenced by gender, association membership, age, the amount of credit acquired, household size and engagement in another occupation at 1%, 5% and 10% significance levels, respectively. Major constraints included high interest rates and other charges (68.0%), insufficient credit disbursement (61.3%) and competing family needs (58.7%). The findings suggest that informal credit supports home-grown rice marketing activities but is accompanied by high interest rates and other charges and repayment challenges. Improved access to affordable, appropriately structured lending and financial literacy support may help marketers manage borrowed funds more effectively.