Comparative analysis of informal borrowing behaviour between male and female-headed farm households in the rural communities of Abia state, Nigeria.

Abstract

The study dealt on the comparative analysis of informal borrowing behaviours between male and female-headed farm households in the rural communities of Abia State, Nigeria. The study was sought to identify the socio-economic characteristics of rural male and female – headed farm households in the study area, and to determine the socio-economic factors that influence borrowing behaviour of rural male and female-headed farm households in Abia State. Multi - stage random sampling technique was adopted in the selection of 216 farm households comprising of 108 male and 108 female headed farm households. Tools of analyses were descriptive statistics of mean and percentages and probit model, The result of the Probit model on the variables influencing borrowing behaviour of male-headed households indicated that the coefficients of household size, farm size, purpose of borrowing, loan duration, interest rate and collateral agreement were the significant variables at varied risk levels, with a Pseudo R² of 0.814. The significant variables that influenced borrowing behaviour of female-headed households using Probit model were households size, loan size, farm size and borrowing purpose with a Pseudo R² value of 0.744. The need to drastically reduce the interest rate charged to farm households on borrowed fund, relaxing the issue of collateral was recommended for this study because of its dampening effect on the desire to borrow by the rural households.

Keywords: Borrowing behaviour, informal credit, probit model, male and female headed