MODERATING ROLE OF FINANCIAL LITERACY IN THE RELATIONSHIPS BETWEEN MICRO FINANCE SERVICES AND THE PERFORMANCE OF SMALL FARMERS IN KADUNA STATE
Aminu Umar, SaminuMaiwada and Anthony, Unyime Abasido
Volume 10 Issue 1
Abstract
The objective of this study is to evaluate the factors that predict and the impact of financial literacy in influencing the performance of smallholder farmers in Kaduna state, Nigeria. Based on the theoretical framework of the Resource-Based View (RBV), this study aims to assess the importance of microcredit, micro savings, and input supply in forecasting farmer performance. Additionally, it seeks to investigate the influence of financial literacy as both a predictor and a moderator in this relationship. In order to ensure representation from each strata, a stratified sampling technique was utilized to disseminate a total of 520 questionnaires among 23 local government regions. Data analysis was conducted using Partial Least Square Structural Equation Modeling (PLS-SEM). The results indicate substantial and favorable correlations among microcredit, micro savings, input supply, financial literacy, and farmer performance. Furthermore, it was shown that financial literacy has a key role in moderating the associations between microcredit, micro savings, input supply, and farmer performance. To promote sustainable agricultural development in Kaduna state, the study recommends prioritization of initiatives aimed at improving financial literacy among smallholder farmers. Additionally, integrating financial education into agricultural extension services can enhance the effectiveness of microfinance interventions in improving farmer performance. Keywords: Microfinance Services, Micro Credit, Micro Savings, Input Supply, Smallholder Farmers, Firm Performance, Farmer Performance
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