Abegunde, V. O.

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Credit diversion has grown to constitute a big problem in agricultural credit system, thereby affecting agricultural

production. This study focused on credit accessibility, allocation and utilization among organic farmers in Oyo

state, Nigeria. Data were collected from 120 organic farmers using a multistage sampling procedure. Descriptive

Statistics, T-test, Probit and Tobit regression analytical approaches were used for data analysis. Results from data

analysis showed that the amount of credit received was significantly lower than the amount of credit demanded by

the organic farmers. Results further showed that the annual income of the organic farmers, source of credit,

experience of difficulty with conditions attached to credit disbursement, amount of credit demanded, and experience

of inflexibility with credit source on credit conditions significantly influenced credit accessibility, while age, annual

income, number of days between loan application and receipt, value of interest rate and accessing total amount of

credit demanded significantly influenced credit allocation by the farmers. This study argues that organic farmers do

divert part of the loans obtained for non-farm purposes and therefore recommends that credit officials should map

out a workable follow-up programme that will ensure that farmers obtaining loan from their institutions use the loan

for the intended purpose.

Keywords: Allocation, Constraints, Credit, Organic farmers, Utilization.