Effects of Credit Access on Agricultural Output Among Farmers in Ogun State

Access to agricultural credit is widely recognised as a critical driver of farm investment and output growth, particularly among smallholder farmers who lack the internal capital to procure improved inputs and technologies. In Ogun State, a densely populated South West state with significant agricultural activity, credit access patterns and their effects on farm output remain insufficiently documented. This study investigates how access to formal and informal credit influences agricultural output among farmers in Ogun State. A structured questionnaire was administered to 170 farmers randomly selected from five local government areas. Output measures were calculated per hectare for the primary crop cultivated by each respondent. Binary logistic regression was used to model credit access determinants, while ordinary least squares regression was applied to assess the effect of credit on output. Results show that only 38 percent of sampled farmers accessed credit in the preceding season. Among credit users, output per hectare was on average 45 percent higher than non-users. Key barriers to formal credit access include collateral requirements, cumbersome application procedures, and limited banking infrastructure in rural areas. Informal credit from rotating savings associations remained the dominant source for most farmers. The study recommends simplification of loan application processes by agricultural banks and the introduction of crop-insurance-backed lending products to reduce collateral dependency. Strengthening cooperative credit societies as credit intermediaries is also proposed. Keywords: agricultural credit, farm output, Ogun State, smallholder finance, cooperatives