Abstract

Aim: The study was aimed to evaluate the impact of informal agricultural credit on food security status of rural farm households in Enugu state, Nigeria.

Materials and Methods: Multistage random sampling was used to select 240 rural farm households from whom data were collected using semi structured questionnaire. Data were analyzed using descriptive statistics, food security index, z-test and probit regression.

Results: The Results showed that farm households applied for ₦95,690.54 from informal sources but received ₦52,885.86 as informal credit. Result further showed that farm households had access to credit from friends/relatives (X = 3.86), daily/weekly contribution scheme (X = 3.51) and rotating joint contribution scheme (X = 3.16). Food security line, food insecurity incidence, food insecurity gap and food insecurity severity of the farm households were N9,612.31, 0.4228, 0.3873 and 0.2640 respectively before access to informal credit, while after access to informal credit, food security line, food insecurity incidence, food insecurity gap and food insecurity severity of the farm households were N12,202.19, 0.3162, 0.2369 and 0.1907 respectively. Z-test analysis showed that access to informal credit impacted significantly on food security line and food security incidence of farm households. Result of Probit regression analysis showed that gender of household head, level of access to informal credit, education level, extension access, farm income and household size were significant determinants of farm households' food security status.

Conclusion: It was concluded that access to informal credit had significant impact on farm households food security status.

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