This study examined the performance of micro credit schemes on agricultural production in Oyo State with a case study of Farmers’ Development Union (FADU). Primary data were collected using a sample size of two hundred farmers disaggregated into one hundred beneficiaries and one hundred non-beneficiaries of (FADU) credit schemes from the identified four zones (Egbeda, Omi-Adio, Lagelu and Akinyele) used for the FADU operation in the state. Frequency distribution, budgetary analysis and ordinary least square multiple regression analysis were used to analyze the data obtained from the survey. The socio-economic characteristics of the respondents revealed that 67% of the respondents were males whereas 33% were females between the ages of 51and 60 years. The profitability analysis showed that was a positive annual gross margin per hectare of beneficiaries (N104,136.00) was higher than that of non-beneficiaries (N70,604.00) at p<0.05, thus implying profitable of food production but higher profitability for FADU beneficiaries. Factors affecting gross marging obtained in food production in the study area include farm size (p<0.05), amount of loan granted (p<0.05), labour (p<0.05) and household size (p<0.05). The study concluded that farmers who patrnonised FADU have benefitted in the area of provision of steady source of working capital which impacted positively on the their profitability. The study further recommended that FADU needs to take care of the inherent problems associated with loan access and utilization by putting appropriate institutional framework in place that will improve quantum of loan made available to farmers while easing repayment bottlenecks.