Explicating the Prevalence of Women Farmers’ Deterrence from Microfinance Banks (MFBs) Loans in South-East Nigeria. A Censored Tobit Regression Model of Analysis

Abstract The Prevalence of Farmers’ Deterrence from loan applications has the technical potential to proliferate, the level of financial exclusion in developing countries. Conversely, assessments of the determinants of the aforementioned practices remain limited. In contrast to erstwhile studies, this paper this fills the research gap by offering specific consideration to a divergent methodology in examining the prevalence of smallholder women farmers’ deterrence from MFBs credit, while considering expressions of the premeditated decisions made by the farmers not to apply for loans. Cross-sectional data collected via the administration of questionnaire were further analyzed using the loan deterrence indices model (LDI) and the censored Tobit regression (CTR) model. Evidence from results showed a high prevalence of loan deterrence by the farmers. Furthermore, we find that farm size, age of the respondents, household size, annual income, education level, proximity to bank, and accessibility to account officer are strong drivers of loan deterrence in South-East Nigeria. We recommend that MFBs should make loaning conditions “farmer friendly” by introducing more account officers, educating the farmers on terms and conditions to be met on loan contracts, extending credit to farmers irrespective of their age, farm size and annual income among others.