Agricultural Credit Allocation and Constraint Analyses of Selected Maize Farmers in Ghana

The study analyzes factors influencing agricultural credit allocation and constraint condition of maize farmers in the Upper-Manya Krobo District in the Eastern region of Ghana. The study uses primary data solicited from 130 maize farmers through the administration of a structured questionnaire. Using the paired sample t-test to test for significant differences between the amounts of credit demanded and the amount received by farmers, it is revealed that the amount of credit received was significantly lower than the amount of credit demanded by farmers. The Probit regression model was then used to estimate the parameters of the determinants of credit constraint condition of the farmers. The empirical results reveal that gender, household size of farmers, annual income of farmers and farm size have significant influence on credit constraint conditions of the farmers. The Tobit regression model was also used to estimate the parameters of the determinants of the rate of agricultural credit allocated to the farm sector. The empirical results of the Tobit regression model reveal that age, bank visits before credit acquisition and the amount (size) of credit received have significant influence on the rate of agricultural credit allocation to the farm sector. The study provides the following recommendations: it is imperative that bank officials visit farmers on their farms before granting them loans, and also farmers must be granted the required amounts of loan to enhance the rate of agricultural loan allocation to the farm sector to ensure increased productivity of crops grown for increased welfare and livelihood of these farmers and the citizens of the country as a whole.