This study investigated the factors affecting loan acquisition among farmers in Otukpo LGA
of Benue State of Nigeria. Primary data collected directly from the farmers were utilised in
this study and analysed using descriptive statistics and probit analysis. The findings indicate
that the loan collected during the 2006/2007 farming season was significantly lower (1000
times lower) that the amount of money spent on family obligations. This brings to the front
burner the issue of food security and income stability of the small scale farmers. It has been
discovered that many small scale farmers tend to sell off their farm produce when prices are
low in order to repay social-obligated loans and also meet up some social obligations. Among
the explanatory variables, interest rate charged and collateral given positively influenced loan
acquisition while response to loan conditions impacted negatively on it. This findings
indicates that farmers are favourable disposed towards taken loan with interest and given of
collateral and this is contrary to what many researchers have tended to postulate.