ANALYSIS OF LOAN DEFAULT AND REPAYMENT PERFORMANCE AMONG FARMERS IN AKWA IBOM STATE INTEGRATED FARMERS’ SCHEME

Abstract

The study examined Agricultural Loan Default and repayment performance among Farmers in Nigeria: The case of the Akwa Ibom State Integrated Farmers’ Scheme (IFS). Simple random sampling technique was used to select a total of 100 loan beneficiaries for the study- 30 IFS loan beneficiaries from the first batch and 70 beneficiaries from the second batch respectively. Tobit model was used to determine and analyze the explanatory variables influencing default rates of the IFS loan beneficiaries were found to be 9.4% and 99.91% respectively. Analysis of the data using Tobit model revealed that 8 explanatory variables, namely marital status, household size, off-farm income, total farm cost, enterprise profitability, debt-asset ratio, ratio of amount request ed/ given and number of visits of supervisors were significant factors influencing loan repayment among the beneficiaries. It is therefore recommended that Government should organize regular training programmes for IFS Supervisors to enhance effective supervision and appraisal of the agricultural projects. This will check the incessant waste of fund that disrupts prompt repayment of such loans and more vehicles should be provided by Government to enhance effective monitoring of the progress of participants’ projects, assist when necessary and offer advice.