ISSN 2375-0693
African Journal of Agricultural Economics and Rural Development ISSN: 2141-5091 Vol. 2 (2), pp. 121-128, April, 2014. © International Scholars Journals
Full Length Research Paper
Analysis of loan default among agricultural credit guarantee scheme (ACGS) loan beneficiaries in Akwa Ibom State, Nigeria
Umoren A. Akpan, Edet J. Udoh and Sunday B. Akpan
1Department of Agricultural Economics and Extension, University of Uyo, Akwa Ibom state, Nigeria.
2Department of Agricultural Economics and Extension, Akwa Ibom state University, Nigeria.
*Corresponding author. E-mail: [email protected]
Accepted 10, March 2014
Abstract
This study analyzed factors influencing defaults in loan repayments among agricultural credit guarantee scheme (ACGS) loan beneficiaries in Akwa Ibom State using Tobit model. A total of 109 ACGS loan beneficiaries were randomly sampled from the study area. Analysis of data using the model revealed that 12 explanatory variables namely: age of the beneficiaries, family dependency level, total farm cost, farm income, time interval between loan application and disbursement, other loan schemes, visits by credit officers, loan duration, government policies, years of experience, loan size and average interest rate charged were significant variables influencing default in loan repayment among the beneficiaries in the study area. The study recommended that efforts should be directed towards promoting a good credit culture and discipline through client education and moral persuasion.
Key words: Loan, default, credit scheme, bank credit, loan repayment.