Analysis of Use of Ajo in Financing Cassava Production in Aniocha North Local Government of Delta State, Nigeria

Ajo collectors are one of the oldest social capital and financial group in Africa. Hence the study focused on the use of ajo in financing cassava production in Aniocha North Local Government of Delta State, Nigeria. The paper becomes necessary due to cassava farmers poor access and use of farm credit in the study area. Purposive random sampling technique was used in selection of twelve communities due to the abundance of ajo cassava farmers. Sample size comprised thirty and thirty cassava ajo members and ajo patronizes respectively. Structured questionnaire was the main tool for data collection. Data collected were analyzed using descriptive statistics, t-statistics and multiple linear regression analysis. Average age was 50.10years. Larger percentages (63.33%) were females. Greater majority (80.00%) were married with a mean household size of 5.0 persons. Average farm size was 1.51Ha while the farmers produced an average output/yield of 1,541.00Kg Ha-1 in the 2014 cropping seasons. Mean farm income was N84,310.00 (($562.067). Findings confirmed the existence of different ajo group in the area. Average membership strength of the various ajo groups were 354 and 568 persons for males and females respectively. Average range of amount granted as loan and mean range of payback period for amount granted as loan from different ajo group in the area were N52,150.00 ($347.67) and 9.21months respectively. Result revealed an average of N78,350.00 ($522.33) and N61,150.00 ($407.67) as the amount of loan applied for and obtained respectively during the 2014 farming season. Mean interest rate charged and average timeliness of loan were 11.50% per year and 4.10 weeks respectively. Estimated t-statistics revealed a t-value and critical value of 3.152 and 2.936 respectively suggesting a significant difference (P<0.05) between the amount of loan applied for and amount eventually obtained by farmers from their various ajo group in the area. The study also found that farmers obtained less than the actual amount of loan they demanded from their various ajo groups in the area. Projected regression result shows that farmers educational level, annual output, farm size, household size, marital status and farming experience were the determinant of volume of loan acquired from various ajo credit group the area. The relationships were statistically significant at 1% and 5% level of probability respectively. The F-ratio (37.831) revealed the overall significant of the model at 1% level of probability. Social capital group such as the ajo credit groups have been invaluable to farmers in the study area. However, farmers complained of service rate and insufficient loan amount. It was therefore recommended that government investment strategies should as a matter of urgency address farmers easy access to credit as well as the reduction of the astronomical interest rate charged by various ajo groups in the area. It is also necessary that government at all levels should supply credit to various ajo credit group, as these would promote cassava production as well as sustain social capital groups/formation in the area. Keywords: Ajo, Social capital, Amount applied and obtained, Range of payback, Timeliness of loan, Analysis, Barrier