Global Advanced Research Journal of Agricultural Science (ISSN: 2315-5094) Vol. 2(3) pp. 088-102, March, 2013. Available online http://garj.org/garjas/index.htm Copyright © 2013 Global Advanced Research Journals Full Length Research Paper Access to Micro credit and its Impact on Farm Profit among Rural Farmers in Dryland of Sudan Abdelateif Hassan Ibrahim 1*2 and Siegfried Bauer 1 1 Institute of Project and Regional Planning, Justus Liebig University of Giessen, Germany 2 Department of Agric-Economics and Rural Development, University of Kordofan, Sudan Accepted 10 March, 2013 Despite the efforts that have been made by government and NGOs to provide credit for rural farmers, yet credit is lacking where it is most needed. This study is primarily intended to assess the access to credit problem that persists in dryland of Sudan, taking North Kordofan as case in point. In addition, it tries to sort-out factors influencing the profit of farmers from agriculture. The study relies on filed survey that is conducted in 2009, using structured questionnaire. It surveyed 200 farm households, which were selected through a multi-stage random sampling technique. Descriptive statistical analysis and Heckman model were applied to analyze the data. Results showed that, farm profits for all categories were SDG 920 (100 SDG ≈ 18 €). The credit users were found to be better off with a profit of SDG 955 compared to SDG 882 for credit non-users. Results obtained from a probit model showed that savings, value of assets and incomes are significant variables determining the credit constrained conditions. In addition, the results of Heckman model showed that credit has limited effect on farm profits. This indicates that loan volumes may be too small for making a significant impact on farm production. Knowing the fact that using OLS for testing the parameters produces a bias in sample, the study used the Heckman model to correct the expected biases. The study suggests that in order for the farm profits to be improved, the agricultural investment should be improved, particularly the adoption of efficient and sustainable technology. This could be possible through increasing the loan amount with faultless repayment records. Keywords: Micro credit, Farm profits, Heckman model, Credit conditions, Poverty INTRODUCTION Most developing countries depend on their agricultural sectors for economic growth, food security and poverty reduction. Cited literature suggests that gross domestic product (GDP) growth deriving from agriculture is twice as effective in reducing poverty compared to GDP growth associated with non-agricultural sectors *Corresponding author’s Email: Abdelateif.Ibrahim@agrar.uni- giessen.de; lateif73@hotmail.com (MILLER, et al., 2010). At the same time, agriculture in developing countries generates on average 29% of GDP and employs 65% of the labour force (WORLD BANK, 2008). In Sudan, the agricultural sector contributed 31.3% to GDP in 2010 (CBOS, 2011). Although its contribution to economic development has declined steadily during the past years due to the focus devoted to the oil sector, agriculture remains important to the majority of the Sudanese population, especially those who live in remote areas. More than 80% of farm