Loan Performance Of Development Banks And Their Impact On Farmers’ Income: A Case Study Of Nigerian Agricultural Cooperative And Rural Development Bank, Kogi State

  • AO Onoja
  • SO Adejoh
  • AM David
Keywords: loan performance, development banks, impact on farmers’ income


Development banks were set up and restructured over the years in Nigeria by various governments to enhance self reliance and improve incomes of rural and urban farmers in Nigeria with huge sums of money. This paper investigated the extent to which one of such banks, NACRDB, had impacted on farmers’ income level in Kogi State. Primary data used
for the study were collected from the branches of the bank in the state using a questionnaire. A multi-stage random sampling was used for the study. The sample constituted of 72 beneficiaries of NACRDB loans scheme. First, three (3) banks were randomly selected from the six (6) of the bank’s branches in the state. Then, 24 loanees were randomly selected from each of the three branches out of a population of 156 beneficiaries from 2001 – 2003. ANOVA and Ordinary Least Squares regression analysis were used to analyze the data obtained from the respondents. Two null hypotheses were tested to achieve the major
objective of the study. The results of the study indicated a positive relationship between loan disbursement and farm income. The study also indicated that loan repayment rate increased in an inverse proportion to volumes of loan disbursed to the farmers. The recommendations
made included the need for more credit supply by the government and credit donors; more branching of the bank; disbursement of loans to farmers in groups to avoid defaults in large volume loans; and the need for the Federal government to increase funding of the bank.

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eISSN: 0794-1005