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Influence of loan repayment of farmer beneficiaries with the Bank of Agriculture (BOA) in Akwa Ibom State, Nigeria
Abstract
This study examined factors that influence loan repayment of beneficiary farmers under the Bank of Agriculture (BOA) in Akwa Ibom State of Nigeria. Primary data used for the study were collected with the aid of a well-structured questionnaire. Simple random sampling was used to select the fifty-six respondents. Data collected were analyzed using simple statistical tools such as means and percentages and Ordinary Least Square (OLS) models. Result shows that 64.3% of the total respondents were males who were about 40.5years old. Majority (96.4%) were married with average household size of 5 persons. Average years spent in formal education was 13years while farming experience was 11years. Majority (78.57%) of the farmers were involved in trading as their secondary occupation. The major reasons why famers borrow were to make higher income through expansion of scale of operations. Good repayment arrangement and the lending policies attracted most clients to borrow from this source. Loan performance indices estimated showed that only 64.38% of the total amount granted as loan was repaid by the beneficiaries as at when due. This situation indicated a low level of repayment performance. The result of the multiple regression analysis showed that sex, age, amount of money borrowed and interest amount were the significant factors that influenced loan repayment. Based on the findings, it was recommended that loans should not be granted to farmers who have defaulted in repayment terms and who might put the loan into effective use. The lending source should strategize on how to censor beneficiaries effectively. The amount granted as loans to farmers should be increased to be more productive to augment gross income of the farmer to repay loan.
Keywords: Loan repayment, farmer beneficiary, Bank of Agriculture (BOA)
