International Journal of Research and Innovation in Social Science (IJRISS) |Volume VI, Issue XI, November 2022|ISSN 2454-6186
Dr. Abdulhadi Ibrahim & Mohammed Indimi Garba
Umar Suleiman College of Education, Gshua, Yobe State, Nigeria
Abstract: The study examines the determinants of access to credit among rural entrepreneurs in Yobe state, Nigeria. Entrepreneurs are faced with numerous challenges with respect to accessing credit to boost their businesses; hence the study attempts to bring out the major determinants of access to credits among rural agricultural entrepreneurs and offers recommendations on what to do to overcome these challenges. To achieve the objectives of this study, we employ Logit regressions and a sample of 270 entrepreneurs was selected from the three geo political zones in the state using random sampling method. Findings from the study show years of entrepreneurial experiences, business plan, financial literacy, number of bank accounts open and membership of cooperative society influence entrepreneurs’ ability to access credit positively while collateral security and cost of borrowing has a negative influence on the entrepreneurs’ ability to access credit facilities from banking sector. The study recommends the need to reduce the cumbersomeness of the credit process and transaction cost involved to the entrepreneurs. The entrepreneurs can also form cooperative groups to make it easier in accessing credit from the financial sector. The process of opening account should also be simplified to enable more entrepreneurs to open the account.
Keywords: Determinants, Rural entrepreneurs, Access to Credit, Yobe State, Nigeria.
I. INTRODUCTION
The difficulty in getting financial support to a start-up of entrepreneurial venture or expand business enterprises is a serious problem for many entrepreneurs inspired by entrepreneurial spirit to build a sustainable business ventures particularly in rural areas (Adamu and Kabuga, 2019). The current estimate from Central Bank of Nigeria (CBN, 2017) suggests the growth of about 37 million small-business enterprises is being undermined by several factors. One of them is access to financial services. However, evidence available in the literature has singled out access to finance as a crucial prerequisite to the growth of these enterprises. Due to the challenges of accessing financial services, especially in the formal financial institutions, many entrepreneurs in the country had to rely on personal savings, contributions from family and parents, and financial services provided by informal money lenders to establish new business or expand the existing ones (Adamu and Kabuga, 2019).