Determinants of loan repayment among agricultural beneficiaries of public funded credit scheme in Ekiti State, Nigeria

Abstract

To cater for the credit needs of the farming population, the Ekiti State Government established Ekiti State Multipurpose Credit Agency (ESMA). This study examined the factors influencing repayment of loan obtained from this agency by the smallholder agricultural loan beneficiaries. Primary and secondary data were used for the study and analysed using descriptive statistics, Tobit regression and the t-test of means. Loan repayment was found to be influenced by age of the famer (p < 0.01), household size (p < 0.05), amount of loan obtained (p < 0.01), amount of loan invested in non-farm activities (p < 0.01), farm income (p < 0.01), income from other sources (p < 0.01), credit use experience (p < 0.05) and price stability (p < 0.10). It is therefore recommended that ESMA should consider carefully farmers' credit use experience in loan disbursement. Furthermore, farmers should be enlightened on marketing practices that would add extra value to their produce to increase their farm income.