An Analysis Of Loan Delinquency Among Small Scale Farmers In Southwestern Nigeria: Application Of Logit And Loan Performance Indices
Abstract
Loan default has been the bane of agricultural financing among small-scale farmers in developing counties. This study examines default rates and investigates the factors responsible for default among the beneficiaries of a credit scheme funded with public money. The beneficiaries of the 1997/98- public loan schemes in Nigeria were surveyed to determine the level of loan default and the variables that contributed to it. Among the borrowers, the Loan Default Index (LDI) was 83%, while the Borrowers’ Default Index (BDI) was 77% indicating large-scale default in the scheme studied. Results from the logit analysis showed that sex of borrower, farm size, loan from other sources, educational level of the beneficiary, and time of loan disbursement affected default in the loan scheme.
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