Determinants of Loan Repayment among Small Holder Cooperative Farmers in Remo Division, Ogun State, Nigeria

Abstract

This study investigated the factors that are crucial in improving small holder cooperative farmers' loan repayment in Remo Division of Ogun state, Nigeria. Primary data used for the study were collected with the aid of well-structured questionnaire. Multi-stage sampling techniques were used to select the 120 respondents. The data were analyzed using descriptive statistics and probit regression model. The results of the descriptive analysis showed that about 56% of the respondents were able to repay their loans promptly while the rest were not. The respondents' mean age stood at 47 years, the majority of them are males and married with fair level of education. The majority of smallholder farmers in the study area had been farming for more than 20 years, while the household size for the majority of them was 4-6 members with average family size of 5. The results of the probit regression analysis revealed that age, level of education, farming experience, net farm income and loan size obtained were the major factors that increase the likelihood of loan repayment, while the number of family dependants reduces the probability of repayment. To improve loan repayment ability in the study area, this study recommended improvement in human capacity development as well as sensitization of the farmers in the study area about the importance of education.

Determinants of Loan Repayment among Small-scale Cassava Farmers in Akpabuyo Local Government Area of Cross River State, Nigeria

“…Results on family size revealed that majority (48.8%) had a large family size of 4-7 persons. This conforms with the findings of Isito et al [28] who reported an average of 6 members per family. Having a larger family especially those with higher number of adult children would enable small-scale cassava-based farmers to have enough labour to work in the farm.…”

“…Majority of the farmers were in the range of 41-50 years (37.5%) indicating that the farmers were young, energetic, still active in farming and dynamic. This is in line with the findings of Isito, Otunaiya, Adeyonu and Fabiyi [28] who reported an average of 47 years for small holder farmers. This result is slightly higher than those of Abula, Otitolaiye, Ibitoye and Orebiyi [29] who reported a mean age of 44 years for farmers in their findings.…”

“…More so, income realized from off-farm activities like trading can be used to support the family needs with little dependence on farm profit during the loan period. The result is in conformity with the findings of Isito et al [28] that increase in the net farm income of the farmers increases the likelihood that the farmers will repay the loan obtained within the stipulated time. However, farmers with higher farm income and off-farm income are more likely to repay their loans than those with lower farm and off-farm incomes.…”