ABSTRACT

This study determined credit mobilization and repayment performance in informal financial organizations in Ikwuano L.G.A of Abia state, Nigeria. Multistage random sampling technique was employed in collecting data from 30 informal final sectors and sixty (60) loan beneficiaries using structured questionnaires. The data collected were analyzed using descriptive statistics and multiple regression analysis. Findings from the study revealed that the majority (59.0 1%) of informal loan beneficiaries were female, it was discovered that rotating savings and credit association (Isusu) granted the highest mean total loan of N540,000 at a mean interest rate of 14.3% to loan beneficiaries. The study showed that a good proportion (3 0.0%) of successful informal loan beneficiaries were into crop production. Also, majority of the informal financial institutions (money lenders, Fixed savings and credit association and cooperative thrift & credit society) gave short-term loan period of one year to borrowers. The result of amount of loan recovered by the informal credit institutions revealed that rotating savings and credit association (isusu) recovered a mean loan of N432,000. It was also observed that cooperative thrift and credit associations recovered a mean loan ofN295,000, mean while individual money lenders recovered a mean amount of 302,000 while mobile bankers (Akawo) and fixed savings and credit association recovered a mean total amount of N184,200 and N290,000 respectively. The result of the multiple regression analysis of factors that influenced credit mobilization in informal financial credit sources with linear functional form as the lead equation revealed that the value of total saving of the sector, interest rate, total amount of loan applied and number of members of the informal credit groups significantly influenced the amount of credit mobilized by informal credit institutions. The combined effects of all the variables explained 58.12% of the total variation in informal credit mobilization. The multiple regression results of factors that influenced informal loan repayment in informal financial credit sources using double-log functional form as the lead equation revealed that amount of loan obtained, farm size, farm income, household size and age were the variables that significantly influenced the amount of informal loan repayment. The R2value (0.5716) was appreciably high while the F-statistics (8.17) was statistically significant at 1 .0 alpha level. One of the teething problems encountered by majority (80.0%) of informal credit institution with credit mobi1izatin was insufficient loanable fund, it was therefore recommended that informal credit institution should adopt better strategies towards mobilizing savings in other to increase their amount of loanable funds.