Abstract
Due to the high rate of defaults amongst loan beneficiaries in Nigeria and Cross River State in particular, this study examined creditworthiness and loan repayment of poultry farmers in Cross River State. Specifically, the study assessed credit worthiness of borrowers, identified factors that discriminate between credit worthy and non credit worthy farmers and analyzed factors that influence the farmers' ability to loan repayment. A total of 120 poultry farmers were used in the study. Data were collected by questionnaire and analyzed by means, frequencies, percentages, discriminant analysis and multiple regression techniques. The results revealed that 51.7% of the respondents were credit worthy. Also, Farmers with better educational level and large farm sizes were non credit worthy. While farmers with large total operating expenditure-income ratio, longer years of farming, older farmers with adequate supervision were credit worthy. The results of the linear regression model showed that farmers with large Loan amounts, better educational level, larger farm income, late disbursement and large farm sizes repaid their loans more. An increase in these variables increased their repayment ability. While farmers who were defaulting in their loan repayments were supervised more than those who were not defaulting. The study recommended that older and experienced farmers should be taken in to consideration when loan applications are made. Key words: Discriminant analysis, poultry farmers, loan repayment.
Highlights
Agriculture has traditionally been acknowledged as the mainstay of the Nigerian economy
The results showed that when observable individual credit worthiness was controlled for, it was found that individual who belong to groups that engaged in screening were less likely to be delinquent
The variables used in the discriminant analysis are; Age = age of the farmer in years; FX = Farmer Supervision; Sex = 1 for female, 0 for male; ED = Educational level; FE =
Summary
Agriculture has traditionally been acknowledged as the mainstay of the Nigerian economy. The primary place it occupies in providing food and fibre for the people has made it the most single factor in influencing the standard of living of many people in developing countries, Nigeria (Chigbu, 2005; Olagunjiu and Adeyemo, 2007; Akande et al, 2008). Agriculture is by far the most important subsector in the Nigerian economy because it engages nearly 70% of the labour force ((Okuneye, 2002).). Its performance in the development process in the 1960s was very commendable.
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