An assessment of extension services on credit uptake among rural farmers: a case study of Guaranty Trust Bank
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Background of the Study
Extension services play a crucial role in bridging the gap between rural farmers and modern financial practices. Guaranty Trust Bank (GTBank) has implemented targeted extension programs designed to educate farmers on effective credit management, agricultural best practices, and financial planning. These services aim to empower rural farmers by providing them with the knowledge and tools necessary to successfully navigate the complexities of agricultural finance (Adekunle, 2023). Extension services are delivered through a combination of on-site workshops, field visits, and digital platforms that disseminate timely and relevant information. Such initiatives help demystify the lending process and encourage farmers to seek formal credit channels, thereby improving overall credit uptake.
The bank’s extension services are integrated into its broader strategy of financial inclusion, where the objective is to enhance borrower capacity and ensure that credit is used productively. By collaborating with agricultural experts and local cooperatives, GTBank ensures that its extension programs are both contextually relevant and technically sound (Olatunji, 2024). These services not only improve financial literacy but also build trust between the bank and rural communities, leading to higher rates of loan application and repayment. However, despite the clear benefits, challenges remain in reaching all segments of the rural population, particularly in regions with limited access to communication technologies or where traditional practices dominate (Eze, 2025).
This study will assess the impact of extension services on credit uptake among rural farmers, focusing on the case of GTBank. By analyzing both qualitative and quantitative data, the research will evaluate how these services influence farmer behavior, credit application rates, and overall loan performance. The findings are expected to provide valuable insights into the effectiveness of extension services as a tool for enhancing agricultural finance and promoting sustainable rural development.
Statement of the Problem
Although GTBank’s extension services have been instrumental in promoting financial literacy and increasing credit uptake, several issues impede their full effectiveness. Many rural farmers continue to exhibit low levels of engagement with formal credit systems, often due to cultural resistance, limited access to training, and a lack of follow-up support after initial workshops (Ibrahim, 2023). Furthermore, the heterogeneity of rural populations means that standardized extension programs may not address localized challenges effectively. There is often a disconnect between the content delivered during training sessions and the practical realities faced by farmers, resulting in suboptimal credit uptake and usage. Additionally, infrastructural limitations, such as poor internet connectivity and logistical challenges in organizing field visits, further constrain the reach and impact of these extension services (Ogunleye, 2024).
Moreover, the absence of a robust monitoring and evaluation framework for these programs makes it difficult to ascertain their long-term benefits and to implement continuous improvements. The reliance on one-off training sessions without adequate follow-up undermines the sustainability of the knowledge gained, potentially leading to a reversion to traditional, less efficient farming practices. This study aims to investigate these challenges by examining the relationship between extension services and credit uptake among rural farmers, with the goal of identifying key factors that hinder or facilitate the success of such programs (Adejumo, 2025).
Objectives of the Study
• To evaluate the impact of GTBank’s extension services on credit uptake among rural farmers.
• To identify barriers to effective implementation of extension services in rural areas.
• To propose recommendations for enhancing the sustainability and reach of these programs.
Research Questions
• How do extension services influence the credit uptake behavior of rural farmers?
• What are the primary challenges faced in the delivery of extension services?
• How can GTBank improve the effectiveness and sustainability of its extension programs?
Research Hypotheses
• H1: Extension services significantly improve the rate of credit uptake among rural farmers.
• H2: Tailored extension programs that address local needs lead to better credit performance.
• H3: Continuous follow-up and support are positively associated with sustained improvements in financial literacy and credit uptake.
Scope and Limitations of the Study
This study focuses on GTBank’s extension services in selected rural communities. Data is collected from farmer surveys, training records, and field interviews. Limitations include regional disparities in program implementation and potential recall bias among participants.
Definitions of Terms
• Extension Services: Educational programs designed to provide technical and financial information to rural communities.
• Credit Uptake: The process by which farmers apply for and receive loans.
• Financial Literacy: The ability to understand and effectively manage financial resources.
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