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CREDIT WORTHINESS AND LOAN REPAYMENT PERFORMANCE AMONG FARMER COOPERATORS IN OWERRI AGRICULTURAL ZONE OF IMO STATE, NIGERIA.

ABSTRACT

This study was conducted in Owerri Agricultural Zone of Imo State, Nigeria. A Two stage random sampling technique was used to select 100 farmer cooperators from whom data was obtained using a semi structured questionnaire. Data was analyzed using descriptive statistics, discriminant function analysis and OLS multiple regression model. Results showed that 91.0% of the cooperators were engaged in the production of root and tuber crops, 65.0% and 56.0% were involved in vegetable and grain production respectively. The discriminant function analysis revealed that amount of loan borrowed and education level made the highest positive contribution to the total discriminate score. A total of 62 farmer cooperators belonged to group 1 (credit worthy) while 38 of the farmer cooperators belonged to group 2 (noncredit worthy). The OLS multiple regression estimates showed that educational level, loan size, household size and farm size were positive and significant at varied critical levels, while interest rate was negative and significant at varied critical levels. We recommend that efforts should be made by the government to provide larger loan amounts to farmer cooperatives which would increase the beneficiary farmer‘s access to basic inputs and improved farm management opportunities and thus lead to higher productivity, reduced per unit cost, higher income and higher repayment of borrowed funds. This can be done by making policies that will improve the linkage between farmer cooperatives and formal credit sources in the area.

Keywords: Credit worthiness, loan repayment, farmers, cooperative societies and credit