This paper uses the Nigerian nationally representative household level data to examine the
factors influencing the decision of farm household to engage in non-farm enterprise (NFE)
activities in rural Nigeria. The model was estimated using Tobit regression, and the result shows
that NFE participation decision of the household significantly depends on its head’s education,
household size, community level infrastructures and its distance to market. Unique to this study,
we found that households having access to social and financial capital can overcome the NFEs
entry barriers. This suggests that for the development of rural entrepreneurship in the country,
the farm households need to be provided with basic education, community infrastructures,
effective micro-credit and social network.