IOSR Journal of Agriculture and Veterinary Science (IOSR-JAVS) e-ISSN: 2319-2380, p-ISSN: 2319-2372. Volume 9, Issue 2 Ver. I (Feb. 2016), PP 09-16 www.iosrjournals.org DOI: 10.9790/2380-09210916 www.iosrjournals.org 9 | Page Effect of Social Capital and Access to Microcredit on Productivity of Arable Crop Farmers in Kwara State, Nigeria Agboola, W.L 1 .*, S.A. Yusuf 1 and M.T. Oloniniyi 1 Department of Agricultural Economics, University of Ibadan, Ibadan,Nigeria Abstract:This study examined the effects of social capital and access to micro credit on productivity of arable crop farmers inKwara State, Nigeria. A multistage sampling technique was employed for the collection of data from 150 households in two local government areas (LGAs) of the state using probability proportionate to size of the LGAs. Data analyses were carried out using descriptive statistics, and regression analysis. Average ageof farmersstood at 45±11.9 years, household size of 6.0±3.1with 84 percent been educated. Different credit sources available to farmers were banks, cooperative societies, local money lenders,government agency, friends and family in decreasing order of importance. Analysis of social capital and access to credit on the arable crop farmers’ productivity revealed that active participation in decision making and credit time lag actually decreased productivity. Moreover, result of the existence of bi-directional causality with the aid of instrumental variable showed improvement in the adjusted R 2 from 0.2015 to 0.238 compared to the use of aggregate social capital index. The study concludes that social capital and access to credit have positive influence on productivity and is an important factor in improving the income of members of local institution. Keywords:Arable crop farmers, Credit access,Kwara State, Productivity,Social capital. I. Introduction Agriculture is considered by many as the “key driver for mass poverty reduction and rural development for most of the developing world” [1]. An important feature of the agricultural sector is its ability to directly meet tangible, basic human needs. In Africa, this sector’s connection to development is undisputed. For many African economies, agriculture is the largest contributor to the economic base and is typically also its largest employer. A foundational key to most developing, industrializing economies is an efficient and productive agricultural sector. A crucial economic challenge facing Africa is rooted in this sector’s underdevelopment. Its failure was, and continues to be, related to the “failure to invest in the productivity of its farmers” [2]. It is generally agreed among researchers andpolicy makers that the poor rural householdsin developing countries lack adequate accessto credit. This lack of adequate accesstocredit is believed, according to [3], to have significant negativeconsequence for various aggregate andhousehold - level outcomes, including;technology adoption, agriculturalproductivity, food security, nutrition, healthand overall household welfare. Theavailability of credit allows both greaterconsumption and greater purchased inputuse, and thus increases welfare of the farmers [4].The availability of microcredit, broadly defined as the provision of financial services such as savings and credit to the poor household is a necessary but not sufficient condition for rapid poverty reduction. Nevertheless, microcredit can play an important role. One element of an effective strategy for poverty reduction is to promote the productive use of farm inputs. This can be done by creating opportunities for raising agricultural productivity among small and marginal farmers. Microcredit is particularly relevant to increasing productivity of rural economy, especially agriculture. In an environment where economic growth is occurring, microcredit also has the capacity to transmit the benefits of growth more rapidly and more equitably through the informal sector. It is well documented that for many small scale farmers, lack of access to financial services is a critical constraint to the establishment or expansion of viable agricultural enterprises. Microcredit may enable small and marginal farmers purchase the inputs they need to increase their productivity, as well as financing a range of activities adding value to agricultural output. Social capital, which is defined by [5], stands for the ability of actors to secure benefits by virtue of membership in social networks or other social structures, is becoming a critical factor (input) in understanding differences in economic outcome. As social interactions intensify, and as social links and social arrangements improves and diversify, social capital also increases. On the other hand, social capital decreases when social interaction is suppressed, causing the disintegration of social links and the petrifaction of social arrangements. This perspective allows researchers and analyst to treat social capital in much the same way as human or financial capital, i.e. development resource that can grow, diminish, or totally consumed. Arable crop farmers like other farmers and small scale enterprise are often plagued with the problem of inadequate capital to run their enterprises which may be as a result of the informal nature of their businesses. Statistics attest that the demand for microfinance financial services remain largely unmet [6,7&8]. This will