AKSU Journal of Agricultural Economics, Extension and Rural Development

REPAYMENT PERFORMANCE AND CREDIT WORTHINESS OF FARMERS UNDER THE BANK OF AGRICULTURE (BOA) LOAN SCHEME IN ABAK LOCAL GOVERNMENT AREA, AKWA IBOM STATE, NIGERIA

Author:  Bassey, Nsikan Edet, Solomon, Ubong Udo and Nkanga, Ofofon Akaso

Abstract
This study analyzed the loan repayment performance and credit worthiness status of farmers who were beneficiaries of Bank of Agriculture loan in Abak Local Government Area, Akwa Ibom State, Nigeria. Data collected from 120 farmers through a single random sampling approach was analyzed using descriptive statistics, discriminant model and logistic regression model. Findings showed that, of a total sum of Sixty three million, two hundred and seventy five thousand naira N63, 275,000 that was accessed as loan, N28, 400,000 (44.9%) and N34, 875,000 (55.1%) were accessed by private individuals and groups, respectively. Of this, N35, 043,600 (55.3 %.) was repaid. A breakdown of this revealed that N16, 095,000 (45.9%) was repaid by private individuals while N18, 948,600 (54.1%) was repaid by groups. This translated to a default rate of 44.6%. Result of the discriminant model revealed that 85.7 percent of the group cases were correctly classified. Among the factors that positively influenced the credit worthiness status of beneficiaries were gender, educational attainment, number of official visit, total monthly income, availability of surety or collateral and farming experience. The result of the Logit model revealed that while educational attainment and total amount accessed exerted significant positive influence on loan repayment, interest rate charged household size and availability of collateral exerted significant negative impact on repayment status of beneficiaries. Numerous recommendations have been offered.