Determinants of loan repayment by beneficiary farmers under the integrated farmers scheme in Akwa Ibom State of Nigeria

Abstract

This study examined determinants of loan repayment by beneficiary farmers under the Integrated Farmers Scheme (IFS) in AkwaIbom State of Nigeria. Most government and other institutional funding effort to agricultural sector have been fraught with difficulties especially defaulting on loan contract. The specific objectives are: assess the factors that affect loan repayment among the beneficiaries, examine the level of loan repayment performance and to ascertain the factors that influence loan repayment of the beneficiaries in the study area.Primary data used for the study were collected with the aid of a well-structured questionnaire. Simple random sampling was used to select the eighty four respondents. Data collected were analyzed using mean, percentages and Ordinary Least Square. Result shows that 89.23% of beneficiaries indulged in diversion of loan to family uses. Loan performance indices estimated shows that only 25.94% of borrowed amount was repaid as at when due. This situation indicated a low repayment performance. Empirical result shows that loan from other sources, farming experience, amount of money borrowed and total income were the significant factors that influenced loan repayment. It was concluded that low repayment limited effective loan administration in the study area. It was recommended that regular monitoring by lender should be heightened to ensure prompt repayment. Farmers should be encouraged by the funding agency to repay loan promptly, this could be through education, persuasion and at times necessary threatening with Police arrest and exclusion from further funding.

Keywords: Loan Repayment, Farmer Beneficiary, Integrated Farmers Scheme, Determinants