Small-Scale Agribusiness Financing Challenges and Household Welfare in Nasarawa State, Nigeria
Abstract
The study aims to assess the financing challenges encountered by small-scale agribusinesses and household welfare in Nasarawa State, Nigeria. Several relevant literatures were reviewed to glean the underlying dimensions of financing gaps and recommendations proffered. This study used a cross-sectional, descriptive research design to assess the financial constraints faced by small- scale farmers in the study area. Multi-stage stratified random sampling technique was employed to select 400 households across the diverse agricultural zones in the State. Data were collected through structured, interviewer-administered questionnaires that captured quantitative metrics on household income, credit access, and asset ownership alongside qualitative insights into seemingly borrowing barriers experienced by respondents. Data collected were analyzed using descriptive statistics and a binary logistic regression model in order to identify the significant socioeconomic determinants that influence the probability of credit access. The study also used the Foster-Greer-Thorbecke index to evaluate the multi-dimensional impacts of the financial limitations on general household welfare and poverty levels. Results obtained indicate that there is a high rate of agro-enterprise registration. Majority of agribusinesses in the State lack access to formal credit facilities, which is mostly due to low financial literacy and the absence of strategic bookkeeping capacity. Respondents point at collateral requirements, exorbitant interest rates, and complex, time-consuming loan approval processes as primary barriers that impede their ability to secure necessary operational capital. Delays in credit disbursement and a pronounced apprehension regarding loan default among smallholders further exacerbate entrenched institutional constraints. The study recommends that a strategic alignment between financial infrastructure and local economic realities of stakeholders can help to catalyze sustained improvements in household welfare and regional food sovereignty. It is also advocated that collaborative initiatives should be promoted and supported by instituting wider monitoring frameworks to evaluate the precise impact of capital access by smallholders on a long-term basis in order to drive reduction in poverty and enhance nutritional resilience of rural households. Key Words: Agribusiness, Financing, Small-scale, Household Welfare, Nasarawa State, Nigeria.
Keywords
AgribusinessFinancingSmall-scaleHousehold WelfareNasarawa StateNigeria.
References
A, O. S., & B., M. (2024). Analysis of Access to Credit Facilities to Small-Scale Farmers in Wukari Local Government Area of Taraba State, Nigeria. African Multidisciplinary Journal of Sciences and Artificial Intelligence, 1(1), 207–220. https://doi.org/10.58578/amjsai.v1i1.3520 Abah, M. A., Oladosu, M. A., Chukwugozie, E. S., Tibile, T. S., Inyang, A. D., Oluwamumipe, S. E., & Agid, O. D. (2026). Sustainable agricultural finance: Innovative models and instruments for smallholder farmers. Agriculture Association of Textile Chemical and Critical Reviews, 14(1), 85–92. https://doi.org/10.21276/aatccreview.2026.14.01.85 Abba, A. A., Halliru, M., Ubale, S., Mustapha, A., Lawan, A. M., Rano, N. B., Idris, A. A., Ladi, H., & Bello, M. M. (2022). Analysis of Household Food and Nutrition Security Status in Sudano Sahelian Region of Northern Nigeria. International Journal of Environment Agriculture and Biotechnology, 7(3), 1–12. https://doi.org/10.22161/ijeab.73.1 Abdullahi, M. S. A., & Gupta, Y. K. (2022). Financing Agriculture in Nigeria: A Comparative Review of Roles Played by Private, Public, and International Financial Institutions and Agencies. Universal Journal of Accounting and Finance, 10(6), 925–937. https://doi.org/10.13189/ujaf.2022.100602 Abolade, A. P., Lawal, I. O., Akanbi, K. L., & Salami, A. (2024). Unlocking the future of food security through access to finance for sustainable agribusiness performance. Management and Entrepreneurship Trends of Development, 4(30), 106–118. https://doi.org/10.26661/2522-1566/2024-4/30-09 Abraham, T. W. (2018). Estimating the effects of financial access on poor farmers in rural northern Nigeria. Financial Innovation, 4(1). https://doi.org/10.1186/s40854-018-0112-2 Abraham, T. W., & Fonta, W. M. (2018). Climate change and financing adaptation by farmers in northern Nigeria. Financial Innovation, 4(1). https://doi.org/10.1186/s40854-018-0094-0 Abu, G. A., Soom, A., Anjeinu, A., Godwin, & Aondonenge, S. (2016). Analysis of factors affecting food security in rural and urban farming households of Benue State, Nigeria. AgEcon Search (University of Minnesota, USA). https://doi.org/10.22004/ag.econ.231375 Adegbite, O., & Machethe, C. (2019). Bridging the financial inclusion gender gap in smallholder agriculture in Nigeria: An untapped potential for sustainable development. World Development, 127, 104755. https://doi.org/10.1016/j.worlddev.2019.104755 Adesiyan, T. (2025). Leveraging Agricultural Credit and Digital Finance for Enhancing Smallholder Productivity and Rural Economic Growth. International Journal of Research Publication and Reviews, 6(8), 642–667. https://doi.org/10.55248/gengpi.6.0825.3090 Adewale, A. T., O.A, L., Aberu, F., & A.K, T. (2022). Effect of Credit to Farmers and Agricultural Productivity in Nigeria. East Asian Journal of Multidisciplinary Research, 1(3), 377–388. https://doi.org/10.55927/eajmr.v1i3.99 Adeyanju, D., Mburu, J., Gituro, W., Chumo, C., Mignouna, D., Ogunniyi, A., Akomolafe, J. K., & Ejima, J. U. (2023). Assessing food security among young farmers in Africa: evidence from Kenya, Nigeria, and Uganda. Agricultural and Food Economics, 11(1), 4. https://doi.org/10.1186/s40100-023-00246-x Ahmad, F. (2025). Enhancing smallholder farmers’ livelihoods: the impact of capital provision on productivity, income, and sustainability. Jurnal Hexagro, 9(1), 21–31. https://doi.org/10.36423/hexagro.v9i1.2113 Asante‐Addo, C., Mockshell, J., Zeller, M., Siddig, K., & Egyir, I. S. (2017). Agricultural credit provision: what really determines farmers’ participation and credit rationing? Agricultural Finance Review, 77(2), 239–256. https://doi.org/10.1108/afr-02-2016-0010 Asiseh, F., Ng’ombe, J. N., Quaicoe, O., Vorsah, R. V., & Prah, S. (2024). Are Credit Doors Equally Open? Gender Perspectives on Agricultural Credit Access in Sub‐Saharan Africa. Review of Development Economics, 29(3), 1597–1612. https://doi.org/10.1111/rode.13179 Balana, B., Mekonnen, D., Haile, B., Hagos, F., Yimam, S., & Ringler, C. (2022). Demand and supply constraints of credit in smallholder farming: Evidence from Ethiopia and Tanzania. World Development, 159, 106033. https://doi.org/10.1016/j.worlddev.2022.106033 Balana, B., & Oyeyemi, M. (2022). Agricultural credit constraints in smallholder farming in developing countries: Evidence from Nigeria. World Development Sustainability, 1, 100012. https://doi.org/10.1016/j.wds.2022.100012 Deresse, M., & Zerihun, A. (2018). Financing challenges of smallholder farmers: A study on members of agricultural cooperatives in Southwest Oromia Region, Ethiopia. AFRICAN JOURNAL OF BUSINESS MANAGEMENT, 12(10), 285–293. https://doi.org/10.5897/ajbm2018.8517 Fadeyi, O. A., Rajendra, A., & Ammar, A. A. (2022). Understanding the role of finance in technology adoption among smallholder maize farmers in Nigeria. African Journal of Agricultural Research, 18(7), 481–492. https://doi.org/10.5897/ajar2022.15974 Fifo, O., & Eloini, O. H. (2026). Strengthening Agricultural Business Resilience: Credit Risk Awareness and Financial Literacy for Livestock and Mixed-Farming Enterprises. International Journal of Innovative Science and Research Technology , 2785. https://doi.org/10.38124/ijisrt/26feb1305 Fronda, J. G. (2024). Empowering Nueva Ecija’s Farmers through Microfinancing: A Blueprint for Enhancing Financial Literacy and Agricultural Resilience. International Journal of Economics and Financial Issues, 14(4), 123–130. https://doi.org/10.32479/ijefi.16330 Garcia, P. (2025). Agricultural Financing Awareness and Access to Microfinance Credit as Determinants of Financial Challenges Among Agricultural Entrepreneurs: A Systematic Literature Review Using Prisma. International Journal of Latest Technology in Engineering Management & Applied Science, 14(10), 933–942. https://doi.org/10.51583/ijltemas.2025.1410000113 Girei, A. A., Ohen, S. B., & B., J. (2016). Income Analysis of Farmers with and without Access to Credit in Southern Agricultural Zone, Nasarawa State, Nigeria. International Journal of Environment Agriculture and Biotechnology, 1(4), 1024–1031. https://doi.org/10.22161/ijeab/1.4.55 Janvry, A. de, & Sadoulet, É. (2020). Using agriculture for development: Supply- and demand- side approaches. World Development, 133, 105003. https://doi.org/10.1016/j.worlddev.2020.105003 Kambali, U., & Panakaje, N. (2022a). A Review on Access to Agriculture Finance by Farmers and its Impact on their Income. Zenodo (CERN European Organization for Nuclear Research). https://doi.org/10.5281/zenodo.6513302 Kambali, U., & Panakaje, N. (2022b). A Review on Access to Agriculture Finance by Farmers and its Impact on their Income. International Journal of Case Studies in Business IT and Education, 302–327. https://doi.org/10.47992/ijcsbe.2581.6942.0166 Karlan, D., Osei, R., Osei‐Akoto, I., & Udry, C. (2014). Agricultural Decisions after Relaxing Credit and Risk Constraints *. The Quarterly Journal of Economics, 129(2), 597–652. https://doi.org/10.1093/qje/qju002 Kehinde, M. O., Shittu, A. M., Adeyonu, A. G., & Ogunnaike, M. G. (2021). Women empowerment, Land Tenure and Property Rights, and household food security among smallholders in Nigeria. Agriculture & Food Security, 10(1). https://doi.org/10.1186/s40066-021-00297-7 Khan, F. U., Nouman, M., Negruț, L., Abban, J., Cismaș, L. M., & Siddiqi, M. F. (2024). Constraints to agricultural finance in underdeveloped and developing countries: a systematic literature review. International Journal of Agricultural Sustainability, 22(1). https://doi.org/10.1080/14735903.2024.2329388 Ky, Y., Akim, A., Dávalos, J., Dayé, M., & Ky, H. (2025). Credit Constraints, Agricultural Productivity, and Household Welfare in Burkina Faso: A Gender Perspective. Agricultural Economics, 56(4), 694–707. https://doi.org/10.1111/agec.70017 Lefore, N., & Claudia, http://orcid. org/0000-0002-8266-0488 R. (2019). Sustainable and Equitable Growth in Farmer-led Irrigation in Sub-Saharan Africa: What Will it Take? CGSPace A Repository of Agricultural Research Outputs (Consultative Group for International Agricultural Research). https://hdl.handle.net/10568/100144 Liverpool‐Tasie, L. S. O., Wineman, A., Young, S., Tambo, J. A., Vargas, C., Reardon, T., Adjognon, G. S., Porciello, J., Gathoni, N., Bíziková, L., Galié, A., & Celestin, A. C. (2020). A scoping review of market links between value chain actors and small-scale producers in developing regions. Nature Sustainability, 3(10), 799–808. https://doi.org/10.1038/s41893-020-00621-2 Marus, E., Mwosi, F., Mary, E. L., & Sammy, G. P. (2020). Financial inclusion: Is it a precursor to agricultural commercialization amongst smallholder farmers in Uganda? A comparative analysis between Lango and Buganda sub-regions. Journal of Economics and International Finance, 13(1), 1–12. https://doi.org/10.5897/jeif2020.1093 Mghenyi, E., Dankers, C., Thurlow, J., & Anyiro, C. (2022). Major Challenges in Primary Agriculture and Off-Farm Agribusiness. In The World Bank eBooks (pp. 59–90). https://doi.org/10.1596/978-1-4648-1724-3_ch4 Michael, A., Giroh, Y. D., Polycarp, M., & Ashindo, Z. E. (2018). Analysis of Rural Farm Households’ Access to Formal Agricultural Credit in Yola South Local Government Area, Adamawa State, Nigeria. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 66(4), 947–954. https://doi.org/10.11118/actaun201866040947 Nair, R. das, & Landani, N. (2020). Making agricultural value chains more inclusive through technology and innovation. In Working Paper Series. https://doi.org/10.35188/unu- wider/2020/795-8 Njoku, C. L., EJIKE, O. S., Emehute, V. C., & Azuamairo, G. C. (2025). Sex-Based Barriers and Drivers of Access to Agricultural Resources in Ebonyi State, Nigeria. Agricultural Science and Food Processing, 2(3), 142–147. https://doi.org/10.62762/asfp.2025.886018 Nuyong, S. P., Emmanuel, J. B., Bala, M. M., & Tseten, I. A. (2025). Comparative Analysis of the Performance of Small and Medium Scale Agro-Based Enterprises in Adamawa State, Nigeria. Journal of Agricultural Extension, 30(1), 182–189. https://doi.org/10.4314/jae.v30i1.21s Ogbonna, S. I., Muhammad, M. U., & Adole, P. O. (2026). Impact of Microcredit on Income Levels and Income-Generating Activities among Small-Scale Farmers in Rural Southeast Nigeria. African Journal of Agricultural Science and Food Research, 22(1), 37–53. https://doi.org/10.62154/ajasfr.2026.022.010 Ogheneakporobo, A. U., Enimu, S., & Peter, O. E. (2026). Effectiveness of financing options in the adoption of climate smart agriculture practices among farmers in delta state, Nigeria. GSC Advanced Research and Reviews, 133–146. https://doi.org/10.30574/gscarr.2026.26.2.0042 Ojo, B. J., Olalere, I. T., Bello, M. A., & Bello, J. M. (2023). Effect of the anchor borrowers’ programme on the food security of smallholder maize farming households in Kwara State, Nigeria. Journal of Agribusiness and Rural Development, 68(2), 197–203. https://doi.org/10.17306/j.jard.2023.01595 Okunlola, O. C., & Ayetigbo, O. A. (2024). Impact of Agricultural Financing on Agricultural Growth Sustainability in Nigeria. ̃The œJournal of Developing Areas, 58(3), 171–203. https://doi.org/10.1353/jda.2024.a929946 Olutumise, A. I. (2023). Impact of credit on the climate adaptation utilization among food crop farmers in Southwest, Nigeria: application of endogenous treatment Poisson regression model. Agricultural and Food Economics, 11(1). https://doi.org/10.1186/s40100-023- 00251-0 Oluwadara, A. S., Z. S., & Saheed. (2026). Impact of Small and Medium Scale Agricultural Enterprises on Household Welfare. International Journal of Research and Innovation in Social Science, 10(1), 7634–7645. https://doi.org/10.47772/ijriss.2026.10100593 Oluwamayokun, A. F. (2018). Smallholder agricultural finance in Nigeria: The research gap. Journal of Development and Agricultural Economics, 10(11), 367–376. https://doi.org/10.5897/jdae2018.0976 Omotayo, A. O., Folorunsho, L. A., & Onyebuchi, C. H. (2016). Access to formal credit facilities among Small-scale crop farmers’ in Gwagwalada Area Council, Abuja, Nigeria. Russian Journal of Agricultural and Socio-Economic Sciences, 49(1), 57–66. https://doi.org/10.18551/rjoas.2016-01.07 Onoh, U. C., Erezi, E., & Clement, B. (2023). Analyzing the Role of Women in Climate Resilience Building and Sustainable Farming Practices in Nigeria. IIARD International Journal of Geography and Environmental Management, 9(4), 65–87. https://doi.org/10.56201/ijgem.v9.no4.2023.pg65.87 Onoja, S. A., Ojone, A. S., & Yusuf, A. T. (2025a). Effect of Small-Scale Agribusness Characteristics on the Utilization of Financial Records in Nasarawa State, Nigeria. Zenodo (CERN European Organization for Nuclear Research). https://doi.org/10.5281/zenodo.17722686 Orivri, O. (2025). Evaluating smallholder credit access and digital micro finance innovations: Linking financial inclusion, productivity growth, poverty alleviation and development across sectors in emerging economies. International Journal of Financial Management and Economics, 8(2), 1001–1012. https://doi.org/10.33545/26179210.2025.v8.i2.634 Osasona, K. K., Salami, M. F., Rotimi, O. F., Belewu, K. Y., & Bonire, J. O. (2024). Credit assess and welfare status of smallholder: evidence from farmers in Kwara state, Nigeria. Perspectivas Rurales Nueva Época, 22(43), 1–21. https://doi.org/10.15359/prne.22-44.1 Oteh, P. E., Salami, O. A., Modupe, A. M., & Alabi, J. A. (2026). Access to Finance and Agro- allied SMEs Performance in North Central Nigeria: An Entrepreneurial Ecosystem Perspective. International Journal of Innovative Science and Research Technology , 421. https://doi.org/10.38124/ijisrt/26feb281 Otitoju, M. A., & Olaiya, A. Q. (2025). Microfinance services and membership of farmer-based organization as drivers of household food security among rice farmers in Niger and Nasarawa States, Nigeria. Indonesian Journal of Agricultural Research, 8(1), 23–31. https://doi.org/10.32734/injar.v8i1.18051 Paul, A., Ayobami, Olanrewaju, L., Ibrahim, Lanre, A., Kamoru, & Orilonise, S., Ahmed. (2025). Unlocking The Future of Food Security Through Access to Finance for Sustainable Agribusiness Performance. In arXiv (Cornell University). Cornell University. https://doi.org/10.48550/arxiv.2511.18576 Ramos-Sandoval, R., & Díaz, C. M. (2024). Why do Small farmers have less access to credit? A Microdata Analysis of the Peruvian case. Nativa, 12(2). https://doi.org/10.31413/nat.v12i2.16758 Rayhan, Md. J., Rahman, S. M. M., Mamun, A. A., Saif, A. N. M., Islam, K. M. A., Alom, Md. M., & Hafiz, N. (2024). FinTech solutions for sustainable agricultural value chains: A perspective from smallholder farmers. Business Strategy & Development, 7(2). https://doi.org/10.1002/bsd2.358 Raza, G., Jan, K., & Kazmi, S. Z. A. (2024). Agri-entrepreneurship in developing countries – a systematic review of smallholders’ constraints. Journal of Agribusiness in Developing and Emerging Economies, 16(2), 328–348. https://doi.org/10.1108/jadee-06-2024-0185 Sandra, B., Lambert, E. H., & Deyganto, K. O. (2024). Overcoming Barriers: Enhancing Women’s Access to Financial Services for Agribusiness in Uganda – An Empirical Review. In Qeios. https://doi.org/10.32388/p4u33k Sennuga, S. O., & Owoicho, A. (2023). Analysis of Gender Issues in Access to Land among Farmers in Karu Local Government Area of Nassarawa State, Nigeria. Journal of Media & Management, 1–8. https://doi.org/10.47363/jmm/2023(5)150 Silong, A. K. F., & Gadanakis, Y. (2019). Credit sources, access and factors influencing credit demand among rural livestock farmers in Nigeria. Agricultural Finance Review, 80(1), 68– 90. https://doi.org/10.1108/afr-10-2018-0090 Sulhan, S. (2025). The Role of Microfinance Institutions in Promoting Financial Inclusion and Reducing Poverty Among Smallholder Farmers in Rural Agricultural Areas. Journal of Information Systems Engineering & Management, 10, 275–284. https://doi.org/10.52783/jisem.v10i46s.8806 Teye, E. S., & Quarshie, P. T. (2021). Impact of agricultural finance on technology adoption, agricultural productivity and rural household economic wellbeing in Ghana: a case study of rice farmers in Shai-Osudoku District. South African Geographical Journal, 104(2), 231–250. https://doi.org/10.1080/03736245.2021.1962395 Widi, R. H., Suprapto, A., & Ellyta. (2025). Innovative Agricultural Financing Models to Enhance Farmers’ Access to Sustainable Credit and Investment. Jurnal Ilmiah Manajemen Kesatuan, 13(5), 3791–3802. https://doi.org/10.37641/jimkes.v13i5.3387
More Articles from INTERNATIONAL JOURNAL OF AGRICULTURAL AND EARTH SCIENCE
Utilization of WhatsApp Groups for Farmer Peer-Learning and Adoption of Improved Agricultural Practices Among Smallholder Farmers in Bayelsa State
Author: Igoki, Weridongha Samuel
Comparative Assessment of Heavy Metal Concentrations in Soils Across Four Local Government Areas of Southern Kebbi State, Nigeria: A Spatial Variability Study
Author: A. Hussaini1, M. A. Augie1, and Musa Audu, M. Ibrahim1. Zakari, S.I, ., I. Bala, and A.Y, Manga1.
Assessment of Heavy Metal Concentrations and Textural Properties of Soils in The Southern Part of Kebbi State, Nigeria
Author: A. Hussaini1, M. A. Augie1, and Musa Audu, M. Ibrahim1. Zakari, S.I, ., I. Bala, and A.Y, Manga1.
Petrography of Rocks Around Rudibida Ganjuwa, Bauchi State, Part of Sheet 128 Se,
Author: B. Suleiman, A. I. Haruna, M. A. Hassan, A. A. Mai Kudi, A. I. Jibrin, I. I. Kariya, H., Y. Mohammed
Temporal Turnover Outweighs Spatial Differences in The Fish Assemblage of a Peri-Urban Tidal River During the Early Rainy Season: The Egbelu Reach of The New Calabar River, Niger Delta, Nigeria
Author: Wala Chimela, Onisowurun Tom Lazarus, and Eke-John Honour Chibueze