ANALYSIS OF SOURCES OF MICRO CREDIT TO WOMEN GROUNDNUT (ARACHIS HYPOGEAE L.) PROCESSORS AND COLLATERAL REQUIREMENTS IN CENTRAL ZONE OF BAUCHI STATE, NIGERIA

The study examined analysis of sources of micro credit to women groundnut (Arachis hypogeae L.) processors and collateral requirements in central zone of Bauchi State, Nigeria. Two local government areas were randomly selected from the central agricultural zone with sample size of 122 groundnut women processors and data were collected with the aid of well-structured questionnaire. Data was analyzed using descriptive statistics and inferential statistics. The results revealed that all (100%) of the groundnut processors were female, 71.3% were married while 9.8%, 8.2% and 10.7 were single, divorced and widowed, respectively. The results also indicated that 35.2% of the respondents had attended secondary school and 27.0% had primary education, 17.2% had tertiary education, 11.5% had never been to school and 9.0% had adult education. Majority (79.5%) had good market access in terms of sales. 19.7% had a fair market access and 0.8% had difficult market access. The results further disclosed that 97.5% of the respondents used local method for groundnut. Majority (53.3%) of the respondents sourced credit through the informal sectors. The findings further showed that majority (86.9%) of the groundnut women processors in Central Bauchi State mainly used relatives as their source of micro credit. Cooperatives source of micro credit, village shopkeepers, local money lenders and faith organizations as well as non-governmental organizations and agricultural traders accounted for 77.0%, 70.5%, 58.2%, 58.2%, 54.1% and 54.1%, respectively. Majority (92.6%) of the groundnut omen processors indicated that household asset was the major collateral they use while obtaining loans from the informal credit sources in the study area. The findings also revealed that salary, land/title deed, cooperative registration and others accounted for 15.6%, 47.5%, 77.9%, and 9.9%, respectively, as other collateral requirements for accessing credit by the respondents in the study area. The study concuded that household asset (92%) was the major collateral the groundnut omen processors used in obtaining loans from the informal credit sources in the study area. Also, (86.9%) of the groundnut women processors major sources of credit was relatives in the study area. The study recommended that women groundnut processors should be provided with simple but efficient equipment at affordable cost, and that soft loans should be made available at low interest rate by the government and non-governmental organizations.