Loan Repayment And Credit Worthiness Of Farmers Under The Nigerian Agricultural Bank In Abia State

ABSTRACT

The study evaluated loan repayment and credit worthiness of farmers under the Nigeria Agricultural Bank, in Abia State Nigeria. Specifically, the study examined the socio-economic characteristics of the respondent, determined the credit worthiness of the farmers, estimated the determinants of loan repayment performance function for the farmers, and identified the problem of securing loan. A multistage random sampling technique was used in selecting respondent from which primary data were collected using questionnaire. A total of 80 farmers were used in the study. The data collected were analyzed using both descriptive statistics such as percentages, mean and inferential statistics such as discriminant analysis and multiple regression. Result from the field survey reveals that 67.5% of the respondent had repaid their entire loan. However, 32.5% of the respondent had not completed payment of the entire loan after due date. The result of the multiple regression showed that Loan asset ratio and interest were key determinants of loan repayment. However the result of the discriminant function analysis showed that household size, income expenditure ratio, interest and age made positive contributions while Loan asset ratio, experience and education made negative contributions. The study recommend that more supervision should be exercise on loan beneficiaries to encourage prompt repayment of loan and households should be effectively educated on the need for family planning so as to reduce the number of household size so to have less mouth to feed.