Agro Dealers in the Loan Market

Determinants of Agro-Dealers’ Participation in the Loan Market in Nigeria.

International Food and Agribusiness Management Review Volume 17 Issue 3, 2014.

Aderibigbe S. Olomola. IFPRI, 2014

Agro-dealership financing deserves policy attention if agro-dealers are to contribute to agricultural transformation. This study examines the issues influencing the decisions of agro-dealers to participate in the loan market, analyzes the demand for business loan by the agro-dealers, and articulates measures for sustainable financing of agro-input business enterprises. Interest rate, debt, value of asset, membership of trading association and source of credit are major determinants of loan demand. Agro-dealers need to organize themselves into input trading associations to enhance their creditworthiness and unleash the inherent social capital and information advantages for improved agro-dealership financing. Diversification of product coverage by agro-dealers and a value-chain approach that links internal financing in the form of trade credit within the agro-input sector with external financing from commercial banks are strongly recommended.