Analysis Of Factors Influencing Loan Default In Formal Loan Repayment Among Farmers In Umuauia Agricultural Zone, Aria State.

ABSTRACT

Nigeria agricultural sector has once served as the mainstay of the nation's economy, with substantial income from cocoa, groundnut, palm produce, hide and skin, and other agricultural produce (Eni, 2006). Thus, adopting new technology by farmers is olten considerable opportunhly to increase production and farm income since returns to investment; savings are usually low in small holder agriculture (Olubiyo and Hill 2005). They also noted that this potential can only be realized if farmers can gain access to funds to finance the additional input that are invariably required. Moreover the obvious solution is for farmers to borrow against the mnroved returns they expect to achieve by adopting improved technologies. They also explained that in agricultural sector, the role of small and medium scale enterprises in employment generation, skill acquisition, output growth, and enhancement of local technology and the mitigation of rural — urban drift cannot be overemphasized. It is in recognition of this important role of credit that both federal and various state governments have intensified efforts to increase the flow of credit to the agricultural sector (Oni et al., 2005)