This study was designed to examine the determinants of credit demand and supply in informal credit markets among food crop farmers in Akwa Ibom State of Nigeria. A multi-stage sampling technique was adopted in selecting 96 credit-user, arable crop farmers and 24 informal credit sources from 6 villages. Primary data were collected from this total of 120 respondents through the use of a structured questionnaire. The simultaneous equation technique, using two stage least squares was employed to examine the determinants of credit supply and demand. Results of data analyses revealed that farm income, profit, education, and interest amount determined demand whereas liquidity, experience in lending and interest amount determined supply. It was from this study that informal credit suppliers consider several factors before supplying credit to the rural farmers. In line with the findings of this study, it was recommended that steps for reducing the high interest rates charged by informal credit suppliers should be taken. Education is an important factor influencing credit demand and use. Designing appropriate educational packages for farmers, both formal and informal such as evening schools and adult education programmes will be beneficial. Government and financial institutions should ensure that credit meant for farming are used for farming by putting in place measures to check abuse. Keywords: Demand and Supply, informal credit, determinants, crop farmers.

1.0 Introduction
Irrespective of the extensive role played by the oil sector of the economy, agriculture still occupies a strategic position in the Nigerian economy. However, it is characterized by a multitude of small scale farmers scattered over wide expanse of land area, with small holding ranging from 0.05 to 3.0 hectares per farm land, rudimentary farming systems and tools, low capitalization and low yield per hectare (Ogundari & Ojo, 2007) leading to gross inadequacy of food. The food problem has been heightened by the relatively unavailability and low level of productive resources used by farmers in the country, a condition that is particularly worsened by poor use of credit. In Nigeria, empirical evidence has established a positive link between the declining agricultural productivity and limited credit facilities (Essien, 2009; Nwankwo, 1983; Nwaru, 2004). This situation threatens the capacity of farmers in their quest for sustainable production. Credit availability to agriculture is justified when farmers are faced with low savings capacity, poorly developed rural financial markets and limited availability of appropriate farm technologies whose adoption is constrained by shortage of funds (Nwaru, 2004). The demand for credit is increased as a result of increased economic activities in the informal sector (Tra & Lensink, 2004). This informs why farm credit has become a critical factor in modeling the growth of agricultural productivity and the development of the rural economy, which consists mainly of agriculturally based economic activities (Nwaru et al., 2004). Therefore, there were moves to popularise micro financing in Nigeria with the introduction of the Agricultural Credit Guarantee Scheme in 1970 which aimed at sensitising banks on the need to make loans accessible to micro businesses (Mejeha & Ifenkwe, 2007). This witnessed the establishment of specialised credit institutions and policies to encourage the regular banks to establish more rural branches. However, the nature and operation of these formal sources have failed not only to deliver credit to a larger proportion of the farmers but also, in promoting a viable delivery system, have caused an increase in the patronage to informal credit sources by rural farmers and other entrepreneurs (Egbe, 2000; Mejeha et al., 2007; Udoh, 2005). Apart from the inability of rural dwellers to access these relatively cheap funds, reducing the usurious rates of interest in the informal sector by lowering the cost of funds to the lenders is far from being achieved (Basu, 1997; Hoff & Stglitz, 1990). Given these circumstances, informal credit sources are unquestionably the most popular sources of finance to the rural and urban population (Gebrekidan, 2006) because the formal credit sources have scared many food crop farmers due to the encumbrances surrounding its use (Udoh, 2005). Unregulated money supply, easy accessibility, easy liquidity and low administrative bottlenecks, collateral free lending, proximity, timely delivery and flexibility in loan transaction are some of the attractive features of informal credit sources to the farmers (Khandler & Farugee, 2001; Srinivas, 1993). Some of these informal credit sources as identified by Srinivas (1993) are relatives, friends, pawn brokers, rotating savings and credit associations, local money lenders and community groups. Therefore analyzing the factors influencing the demand for and supply of credit would have significant policy implications which would be helpful in redressing the relative decline from low patronage of credit facilities. The major objective of this study is to analyze the determinants of credit supply and demand in the informal credit markets amongst food crop farmers in Akwa Ibom State of Nigeria.

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