ESTIMATION OF LOAN DEFAULT AMONG BENEFICIARIES OF A STATE GOVERNMENT OWNED AGRICULTURAL LOAN SCHEME, NIGERIA

2008, 9 (2)   p. 343-352

Edet UDOH

Abstract

This paper analyses the extent of default among beneficiaries of government sponsored loan scheme. The loan performance indices estimated reveal that over 75% of the loans disbursed by AKSALB in the period under review were still held by 59 percent of the loan beneficiaries. This situation is an indication of high level of loan defaulting among the benefiting farmers. Certain personal and facility factors are estimated to determine the probability of default among the beneficiaries. Notably among these include sex, household size, farm size, loan from other sources, primary occupation of the beneficiary, time lapse between loan application and disbursement, total farm expenditure and duration of the granted loans. With such high level of default, the Board outreach and sustainability capacity is questionable thus putting a caveat on the relevance of the Board as agricultural micro financing institution.

Keywords

loan default, agricultural loan scheme, determinants, nigeria

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