Abstract
Most households in Rural Northern
Nigeria are engaged in farming hence exposed to the vagaries of Climate
Change. This study examines the exposure of rural farm households to
climate change in rural northern Nigeria and the effect of financial
inclusive services as an adaptation strategy. It also examines whether
or not, the poorest income quintile would benefit the most from
programmes aimed at increasing access to financial services as a Climate
Change adaptation strategy in selected rural communities of Northern
Nigeria. Questionnaires were administered to 320 respondents in two
rural communities (Rijau and Fakai).
Descriptive analysis show
that rural farm households are affected by Climate Change through
increased temperature, prolonged dry season, floods and drought which
leads to low post harvest and in turn, low income. Unfortunately, 96% of
those seeking access to finance to mitigate these impacts are unable to
do so due to financial exclusiveness. To identify appropriate financial
service that would enable the rural households adapt, results from the
ordered logit model showed that access to financial services, using
formal financial institutions and farmers’ savings clubs, have a
positive effect on vulnerable farmers, mostly women.
Although, evidence from the scenario analysis showed that increasing access to credit to low income farmers would benefit the bottom 20%, it was not so for the scenario with traditional crop insurance policy. The study concludes that reforms by the Central Bank of Nigeria necessitating microfinance institutions to refocus their products/services to those who need them the most, using group arrangements, would: (1) enhance access to financial resources, (2) enable farmers build resilience to climate change, (3) keep rural households in the farming business, and (4) contribute to actualizing the decisions reached in UNFCCC Conference of Parties (COP) 21 Section 55 Subsection (b) paragraph (ii) which seeks to identify initiatives that would better deliver microfinance to poor farmers as a Climate Change adaptation strategy.