Trend performance in credit financing of rural business activities in Nigeria: a case study of community banks in Ibadan, Oyo State, Nigeria
AbstractThe study aimed at revealing and explaining the trend in performance indicators of agricultural and non-agricultural loan advanced to beneficiaries by some rural community banks (CBs). The tools used included growth rate analysis, loan stability and repayment indices and correlation coefficient. Empirical results showed that there was an increasing trend in the volume of loan granted and number of beneficiaries in all sectors between 1992 and 1999. Agricultural loan as a proportion of total volume of loan decreased almost consistently from 1992 to 1999 while the proportion increased for other sectors. Agriculture had loan growth rate of 10.57% compared with 28.06%, 24.9% and 18.73% for manufacturing, commerce and transport/communication sectors respectively. This indicates that rate of loan volume expansion is faster in other sectors than agriculture. The correlation index was smallest for agriculture (r = 0.636) and largest for manufacturing (r = 0.917) with the connotation that agriculture has the greatest tendency to suffer a reduction in average loan volume per beneficiary. The study concludes that agriculture is receiving a poor attention from the CBs in terms of credit. Measures are suggested to improve CBs credit to agriculture and repayment performance of agricultural loan beneficiaries.
International Journal of Agriculture and Rural Development Vol. 7(1) 2006: 50-60