The Impact of Agricultural Credit Guarantee Scheme Fund (ACGSF) on Rice Production in Kura LGA, Kano State-Nigeria

Abstract

Agricultural financing plays a vital role in enhancing farm productivity, allowing farmers to allocate funds for necessary inputs like fertilizers, better seeds, chemicals, and machinery. Nevertheless, many smallholder farmers face considerable obstacles in obtaining formal credit because of issues like illiteracy, brief repayment timelines, and strict lending requirements. This research investigates how the Agricultural Credit Guarantee Scheme Fund (ACGSF) influences rice production in Kura Local Government Area, Nigeria. By employing both descriptive and inferential statistical methods, particularly Ordinary Least Squares (OLS) regression, the study reveals that ACGSF positively impacts rice output significantly. Key factors such as farm size, fertilizer use, labor input, and seed quality exhibit strong statistical significance in influencing rice production post-ACGSF intervention. However, credit accessibility remains a challenge, as many farmers struggle with bureaucratic loan application processes, collateral requirements, and financial literacy barriers. The study highlights that while ACGSF has contributed to increased agricultural output; its full potential is hindered by systemic constraints. To enhance the effectiveness of the scheme, policy measures such as financial literacy programs, flexible repayment structures, and improved risk mitigation strategies (e.g., crop insurance) should be implemented. Strengthening farmer-lender relationships and expanding institutional credit access will further ensure the sustainability of agricultural financing and overall sectoral growth.