Authors
Department of Agricultural Economics, Federal University of Technology, Owerri, Imo State
Abstract
The study investigated the loan repayment, its determinants and socio-economic characteristics of microfinance loan beneficiaries in the Southeast states of Nigeria. It was carried out in three states of the five southeast states. Using a multistage sampling technique, a total of 144 loan beneficiaries in the three segments of MFIs, namely; formal (commercial and development banks); semi-formal (NGOs-MFIs) and informal (ROSCAS, “Isusu” and co-operative societies) were randomly selected and interviewed in the three states. An ordinary least square (OLS) multiple regression analysis was carried out to isolate and examine the determinants of loan repayment from the respondents’ perspective. Results showed that beneficiaries had low level of education, operated enterprises at a relatively small scale, had large family size and were of middle age. Further, it was found out that the majority of the respondents were involved in farming enterprise (crop and poultry) even though trading was the most prominent single non-farming enterprise (trading, processing and artisanship). The result affirmed that the informal sector respondents recorded the best repayment rate, followed by the respondents of semi-formal and the banks brought the rear. Outstanding among the determinants of loan repayments from the respondents’ perspective were; loan size, level of education, experience, profitability and portfolio diversity. These, therefore deserve special attention in loan administration of MFIs.
Keywords
| 1- Besley, T. (1994). How Do Market FailuresJustify Interventions in Rural Credit Markets? WorldBank Research Observer. 9(1): 27-48. [DOI via Crossref] | ||||
| 2- Central Bank of Nigeria (2002). Baseline Survey ofMicro Finance Institutions in Nigeria. CBN Abuja. P2. | ||||
| 3- Central Bank of Nigeria (2005). Micro FinancePolicy, Regulatory and Supervisory Framework forNigeria. CBN Abuja P. 2 | ||||
| 4- Coelli T and G.B. Battese (1996). Identificationof Factors which Influence the Technical Inefficiencyof Indian Farmers. Australian Journal of AgriculturalEconomics. 40: 103-128. [DOI via Crossref] | ||||
| 5- Dayanandan, R., & Weldeseassie, H. (2008).Determinants of Loan Repayment Performanceamong Small Farmers in Northern Ethiopia. Journalof African Development Studies. (Abstract). [PMC Free Fulltext] | ||||
| 6- Eze, C.C., & Ibekwe, U.C. (2007). Determinantsof Loan Repayment under Indigenous FinancialSystem in Southeast, Nigeria, Medwell Journals.2(2): 116-120. | ||||
| 7- Feijo, R.L.C. (2001). The Impact of a FamilyFarming Credit Program on the Rural Economy ofBrazil. www.anpec.org.br/encontro 2001. | ||||
| 8- Kanbur, R.S.M. (1987). Measurement and Alleviationof Poverty, with an Explanation to the Effectof Microeconomic Adjustments. Cabral Lidia (2006).Poverty Reduction Strategies, and the Rural ProductiveSectors: What Have We Learnt, What Else do Weneed to ask? ODI Natural Resources Perspective100, UK. | ||||
| 9- Njoku, J.E. and M.R. Odii (1991). Determinantsof Loan Repayment under the Special EmergencyLoan Scheme (SEALS) in Nigeria: A Case Study ofImo State. African Review of Money, Finance andBanking. 1: 39-52. | ||||
| 10- Njoku, J.E. & Obasi, P.C. (2001). Loan Repaymentand its Determinants under the ACGS in Imo State,Nigeria, Africa Review of Money Finance andBanking, (Abstract). | ||||
| 11- Ogundare, K. (2009). Technical Efficiency ofFarmers under Different Multiple Cropping Systemsin Nigeria. Journal of Tropical and Sub-TropicalAgro Ecosystem 10: 117-120. | ||||
| 12- Ohajianya, D.O., & Onyenweaku, C.E. (2003).Demand for Community Bank Credit by small HolderFarmers in Imo State, Nigeria. Journal of SustainableTropical Agricultural Research. (Abstract). | ||||
| 13- Olagunju, F.I. (2007). Impact of Credit Use onResource Productivity of Sweet Potato Farmers inOsun State Nigeria. Journal of Social Sciences 14(2): 175-178. | ||||
| 14- Oyeyinka, R.A., & Bolarinwa, K.K. (2009).UsingNigerian Agricultural and Cooperative Bank, SmallHolder Loan Scheme to increase agricultural productionin rural Oyo State, Nigeria". InternationalJournal of Agricultural Economics and Rural Development.(Abstract). | ||||
| 15- Parikh, A.E., & Mirkalan, S. (1995). Measurementof Economic Efficiency in Pakistan, AmericanJournal of Agriculture. 32:53-61. | ||||
| 16- National Population Commission (2006). PopulationCensus of Federal Republic of Nigeria, AnalyticalReport of the National Level, Abuja, NPC. | ||||
)