Repayment Performance among Cassava Farmer-Beneficiaries of Microfinance Institutions (MFIs) In Abia State, Nigeria

Main Article Content

K. C. Obike
C. K Osondu


This study investigated repayment performance among cassava farmer-beneficiaries of microfinance institutions (MFIs) in Abia state, Nigeria. The instrument for data collection used was a semi structured and pre-tested questionnaire. Multistage random sampling technique was used to select 120 cassava MFI- farmer beneficiaries. The period of data collection under review covered a duration of five years (2005 – 2010).  Data collected was analyzed using descriptive statistics, discriminant function analysis and OLS multiple regression model. The empirical results revealed that the year 2006 under review has the highest average loan recovery rate of 86.0%, while the lowest average loan recovery rate was 78.0%.The result also revealed that 88 out of 90 MFI cassava farmer beneficiaries were grouped as worthy while 28 out of 30 were grouped as unworthy. The discriminant function analysis was significant at 1.0% with a canonical correlation of 0.795, wilk Lambda of 0.227 and a chi-square of 237.126  More so, cassava farmers with better education, larger farm sizes, good farming experience, extension supervision and low total operating expenditure to income ratio were credit worthy. However, cassava farmer MFI beneficiaries with lower loan to asset ratio were set to be non- credit worthy. Cassava farmers who repaid their loan according to the linear regression were those with better education, high loan volume and extension supervision all these variables had positive relationship to loan repayment. More so, the result revealed that farmers with more years of farming experience and late loan disbursement defaulted in their loan repayment. It is therefore, recommended that education and extension supervision should form a major trust in policy formulation in microfinance institution administration in Nigeria.

Article Details

Articles/Agricultural Economics, Rural Sociology & Extension


Abia State Agricultural Development Project (ABSADP), (2005). A colossus in Agricultural Transformation Pp. 1-6.

Abraham G. (2002). Loan Repayment and its Determinants in Small Scale Enterprises Financing in Ethiopia: Case of Private Borrowers around Zeway Area. A Thesis Submitted to the School of Graduate Studies of Addis Ababa University.

Adebisi M. V. (2007). Appraisal of Credit Worthiness of small scale Farmers in Bosso Local Government Area of Niger State. A B.Tech Agric project Department of Agricultural Economics And Extension Technology, Federal University of Technology, Minna, Niger State.

Adegbite, D.A. (2009) Repayment Performance of beneficiaries of Ogun State Agricultural and Multipurpose Credit Agency (OSAMCA) in Ogun State, (2004 - 2007).American – Eurasian Journal of Sustainable Agriculture 3(1); 117 – 125.

Afolabi, J.A. 2010. Analysis of Loan Repayment among small scale farmers in Oyo State, Nigeria Journal of Social Science. 22(2) : 115 – 119.

Ajah, E.A., Eyo, E.O and Abang S.O (2013).Repayment Performance among Cassava and Yam Farmers under Nigerian Agricultural Bank small Holder Loan Scheme in Cross River State Nigeria. British Journal of Economics, Management and Trade 3(4): 437 – 467

Ezeh C.I, (2003) Credit worthiness and determinants of loan repayment of small holder farmers in Abia State, Nigeria, Nigerian Journal of Sustainable Tropical Agriculture Research, 5:10-13.

Ezeh C.I., Anyiro C.O and Chukwu J.A (2012).Technical Efficiency in Poultry Production Broiler Production in Umuahia Capital Territory of Abia State, Nigeria. Greener Journal of Agricultural Science 2(1); Pp 1-7

Godquin, M. (2004). Microfinance Repayment Performance in Bangladesh: How to Improve the Allocation of Loans by MFIs. World Development, Vol. 32 (11), Pp. 1909-1926

Guttman M.J. (2007). Repayment Performance in Microcredit Programs: Theory and Evidence. Working Paper-11, Networks Financial Institute, Indiana State University.

Kohansal M.R., Mansoori H. (2009). Factors affecting loan Repayment Performance of Farmers in Khorasan-Razavi Province of Iran. Paper presented at the Conference on International Research on Food Security, Natural Resource Management and Rural Development, University of Hamburg, October 6-8, 2009.

Mbanasor, J.A. and Nto, P.O.O (2008). Discriminant Analysis of Livestock Farmers Credit Worthiness Potentials under Rural Banking Scheme in Abia State, Nigeria. The Nigerian Agricultural journal, 39 (12): 1-7.
National Population Commission. (NPC) (2006). Preliminary 2006 census figures. Retrieved September, 2007 from PDF.

National Root Crops Research Institute (NRCRI). (2003). NRCRI Annual Report. Umudike, Umuahia, Abia State Nigeria.

National Root Crops Research Institute (NRCRI). (2008) Annual Report. Umudike, Umuahia, Abia State Nigeria.

Njoku, J.E. and Odii, M.A.C.A (1991). Determinants of loan Repayment under the Special Emergency Loan Scheme (SEALS) in Nigeria: A Case Study of Imo State. African Review of Money, Finance and Banking 1(1): 39 – 52

Njoku, J.E. and N.C. Nzewa, (1990).“Loan Repayment and its Determinants. Under the Smallholder Direct Agricultural loan Scheme in Imo State, Nigeria. Nigeria Agricultural Journal, 28(3): 247-254.

Nwachukwu, I.N. C.S. Alamba, and A. Oko-Isu (2010). Determinants of institutional credit repayment performance among farmers in Afikpo North LGA of Ebonyi State, Nigeria. Advances in Agriculture and botanics-International journal of the bioflux society, 2(3): 279-284.
Nweze, N.J. (1991). The Role of women Traditional Saving and Credit Cooperative in Small Farm Development in Africa. In: Oguta C.A. (Eds). Issues in Africa Rural Development, pp 234 – 236.

Ngwaziem, G.C. (2013). Rural Credit Supply and Loan Repayment Performance in Informal Financial Sectors in Abia State, Nigeria. A.B. Agricultural Project Report. Department of Agricultural Economics and Extension, Abia State University, Uturu.

Okorie, A. (1989). “Major Developments of Agricultural Small-Holder Loan Repayment in a Developing Economy: Emperical Evidence from Ondo State, Nigeria” Journal of Agricultural Administration, 2(1):223 – 234.

Onyeagocha, S. U. O., Chidebelu, S.A N. D. and Okorji, E. C. (2012). Determinants of Repayment of Loan Beneficiaries of Micro Finance Institutions in Southeast States of Nigeria. International Journal of Agricultural Management and Development, 2 (3): 167-175.

Onyenucheya F. and Ukoha O.O (2007). Loan repayment and credit worthiness of farmers under the Nigerian Agricultural Cooperative and Rural Development Bank NACRDB. Agricultural Journal.; 2(2):265–270.

Okorji E.C. and Mejeha R.O. (1993). The formal agricultural loans in Nigeria: The demand for loans and delinquency problems of small holder’s farmers in Owerri Agricultural zone of Imo State Nigeria. International Journal of Tropical Agriculture.1 (1):1–13.

Ugbomeh, G.M.M, Achoja, F.O. Ideh, V. and Ofuoku, A.O (2008). Determinant of Loan Repayment Performance among women Self Help Groups in Bayelsa State, Nigeria. Agriculture conspectus Scientifics.73 (3): 189-195