Abstract

Agricultural micro-credit repayment has been a thorny issue in Nigeria, and in particular, Niger State. This study therefore assessed the socio-economic characteristics of Agricultural micro-credit beneficiaries under Minna Micro-finance Bank; determined the volume of micro-credit applications and receipts; ascertained the determinants of micro-credit repayments by beneficiaries and examined the challenges encountered by beneficiaries in obtaining and repaying micro-credits. Multi-stage sampling technique was employed to select 180 respondents for the study while descriptive statistics and Multinomial Binary Logit model were employed for data analyses. The study affirmed that substantial proportion of respondents (42.78%) were smallholders owning between 1.1 to 2.0 ha of land. Ironically, 61.67% do not belong to cooperatives. The Multinomial Logit model revealed that sex, membership of cooperatives, loans granted and duration of micro-credit repayment were positive determinants of repayment, implying that these variables were significantly associated with the classification of beneficiaries under the non-repayment and partial loan repayment groups relative to the group of respondents who had fully repaid their loans. In addition, the elastic variables, namely, sex (3.58), cooperative membership (5.95) and loans granted (2.02) connotes that a unit change in these variables will lead to a more than proportionate change in the probability of classifying respondents into the non-repayment group relative to the full micro-credit repayment group. The study further established that repayment increased with the volume of micro-credit received. Majority (68.89%) of the respondents also indicated that the short period of loan tenor, high interest rate (55%) and loan repayment moratorium (54%) were major obstacles to loan access and repayment. The study concluded that agricultural micro-credit repayment performance by beneficiaries of Minna Microfinance Bank was considerable. Policy option requires that efforts be directed at complementing the resource pool of agricultural micro-credit with long term or idle funds, such as, the pension funds. This will guarantee or create room for reasonable duration for micro-credit repayment to the advantage of beneficiaries while not compromising the sustainability and revolving nature of the scheme. Basing interest rates on social and economic considerations will also go a long way in enhancing repayment among small-holder farmers. Channeling micro-credits through farmer institutions and ensuring effective monitoring will also enhance effective micro-credit recovery.

Key words: Micro-credit, repayment, moratorium, cooperatives.