Evaluation of the Impact of Microfinance Credit on Agricultural Production of Small-Scale Farmers in Ogun State, South West Nigeria

Access to credit remains one of the most persistent constraints limiting agricultural productivity among small-scale farmers in Nigeria. Microfinance institutions have emerged as key alternative credit channels for rural farming households that are often excluded from formal banking services. This study evaluated the impact of microfinance credit on agricultural production among small-scale farmers in Ogun State. A sample of 108 farmers, comprising both microfinance beneficiaries and non-beneficiaries, was selected through stratified random sampling from three local government areas. Data on credit access, loan amounts, utilisation patterns, and production outcomes were collected using structured questionnaires. Propensity score matching and descriptive analysis were employed to compare production outcomes between the two groups. Results showed that microfinance beneficiaries recorded production values approximately 31 percent higher than non-beneficiaries, with improved access to inputs and timely planting driving the difference. However, high interest rates and short repayment windows were identified as constraints limiting optimal credit utilisation. The study recommends that microfinance institutions design agricultural-specific loan products with repayment schedules aligned with crop harvest cycles. Collaboration between the Ogun State Government, commercial banks, and microfinance bodies to create risk-sharing guarantee schemes is also advocated. These findings are relevant to rural finance policy discussions in South West Nigeria. Keywords: microfinance, credit access, agricultural production, Ogun State, smallholder farmers.