REGRESSION ANALYSIS ON THE EFFECT OF AGRICULTURAL LOAN ON FARM YIELDS

The study explores the impact of agricultural loans on farm yields in Nigeria, specifically within Ohafia Local Government Area (L.G.A) of Abia State. The research was motivated by the significant role agriculture plays in Nigeria’s economy and the challenges faced by smallholder farmers, particularly their limited access to financial resources. The study adopts a regression analysis approach to investigate the relationship between agricultural loans and farm productivity, with a focus on factors such as financial literacy, loan duration, and the accessibility of credit facilities. Data was collected from 203 commercial farmers in Ohafia L.G.A using structured questionnaires. The findings reveal a positive and significant relationship between agricultural loans and farm yields. Financial literacy emerged as a critical factor, enhancing the effective utilization of loans and leading to improved farm productivity. Additionally, the study found that longer loan durations positively influenced farmers’ income stability and investment in productivity-enhancing activities. The study concludes that agricultural loans are essential for boosting farm yields and recommends that financial literacy programs be implemented to help farmers better manage these loans. Furthermore, the study advocates for policy reforms to make loan acquisition processes more accessible to farmers, thereby promoting agricultural growth and economic stability in the region