Effect of Informal Credit on the Profit of Garri Marketers in Isuikwuato L.g.a, Abia State

The study examined the effects of informal credit on the profit of garri marketers in Isuikwuato L.G.A, Abia State. Specifically, the study described the socioeconomic characteristics of garri marketers in the study area; identified the various informal credit sources used by the respondents; examined the cost and return of garri marketers in the study area; determined the effect of informal credit on the profitability of the respondents; estimated the determinants of profit of garri marketers in the study area and identified the challenges of garri marketing in the study area. Multi-stage random sampling technique was used in the selection of the100 respondents. Data for the study were obtained using a well-structured questionnaire and interview schedule. Data were analysed using means, frequencies, percentages, correlation coefficient and multiple regression model. The result of the analysis showed that majority of respondents were females, young, educated, experienced and had mean household size of 4 persons. Garri marketers realized a total revenue of ₦153,588.00 and the total marketing cost was ₦88,664.91 with net return of N64.923.09. The coefficient of correlation was 0.67, implying a positive and strong correlation between informal credit and profitability of garri marketing. Age was statistically significant at 1% probability level and had an inverse relationship with the profitability of the respondents. The coefficient of the household size from the regression analysis was significant and positive at 1% level of significance. The coefficient of the marketing experience was significant and positive related to profitability at 1% level of significance. Credit amount was statistically significant at 1% significant level and positively related to net profit of the respondents. Transportation cost was statistically significant at 1% and negatively related to net profit of the respondents. Price fluctuation (99.00%), inadequate market infrastructure (85.00%) and high market charges (70.00%) are the three main challenges that rice marketers encountered. The study recommended that basic infrastructural facilities such as good roads network should be made available to curtail marketing cost and to increase the profit of garri marketers.