Social Capital and Loan Repayment Capacity of Agripreneurial Groups' in Abia State, Nigeria

Abstract

Entrepreneurship is the ability to take significant amount of risk while managing and organizing a new or existing business enterprise with the sole motive of making profits. Agricultural entrepreneurship, also known as agripreneurship is the ability of farmers or farm firms to take substantial risks while producing, managing, directing and marketing their agricultural produce. Agripreneurs are the agricultural entrepreneurs. Selected social capital variables such as years of membership in social groups/organizations, number of meeting attendance, cash and labour contributions of members, etc., were incorporated into the research to determine the agripreneurs’ loan repayment capacity in Abia State, Nigeria. A multi-stage purposive sampling technique was employed to select the respondents. Greater percentage of the agripreneurs were male. Mainstream of them were in their active and productive age, hence could form groups for easy access to credit or loans in their respective enterprises. The agripreneurial groups’ sourced their loans from money lenders, ROSCA (Rotating Savings and Credit Association), family and friends/relatives. Others sources were through microfinance banks, commercial banks, self-help groups, cooperative societies and savings collectors/mobile bankers. Majority of the agripreneurs were regarded as good credit risk. The major factors affecting the agripreneurial loan repayment capacity was trust, assets, interest rate and the loan duration. Agripreneurs should be encouraged to participate more actively in group activities, not just for what they can benefit but for what they can give; as effective participation accelerates access to pooled productive resources.