What Determines the Frequency of Loan Demand in Credit Markets among Small Scale Agro based Enterprises in the Niger Delta Region of Nigeria? An Empirical Analysis

Abstract: The study was designed to determine the frequency of loan demand in credit markets among Small Scale Agro based Enterprises in the Niger Delta Region of Nigeria. A multistage sampling technique was adopted in selecting 264 agro based enterprises and 96 agro based enterprises that accessed informal and formal credit through the use of structural questionnaire and oral interview. A total of 360 respondents selected were used for the study.  Structural characteristics of the enterprises were described using descriptive statistical tools such as percentages, means and frequencies. The poisson regression model was employed to examine the factors affecting frequency of informal and formal credit access by the enterprises. Poisson regression analyses showed that experience in borrowing, income, guarantor, social capital and non agro based income significantly influence frequency of informal credit access, whereas, education, Interest, collateral, and non-agro-based income significantly influence frequency of formal credit access. Education is a significant factor influencing frequency of formal credit demand; therefore, entrepreneurs should be encouraged to enroll in evening programmes, and should take advantage of the current free education policy of some of the state governments in the region. Agro-based entrepreneurs should be encouraged to form community based advocacy groups where groups act as a surety for lenders. This will enhance credit access and prompt repayment.