EFFECT OF VOLUME OF MICRO-CREDIT ON FARMERS ANNUAL TURNOVER IN EDO STATE NIGERIA: IMPLICATIONS FOR LOAN REPAYMENT
The study examined the effect of volume of loan received on farmers' annual turnover and loan repayment. Multistage random sampling procedure was used in selecting 150 arable crop farmers in the study area. Data collection was facilitated by means of a structured questionnaire and analyzed using descriptive statistics and regression analysis. Findings from the study show a positive relationship between volume of loan received and farmer's annual turnover at 1% level of significance. Farmers who received higher volume of loans recorded higher annual turnover than their counterparts who received less. The analysis of loan repayment performance of the farmers in Edo State showed an average repayment rate of 90.1%, which can be attributed to efficient loan utilization and the need to qualify for loan next time. The Coefficients of loan received, and educational level were directly related to loan repayment and significant at 1% level and farm size and annual income at 10% level. The coefficient of household size had an indirect relationship with loan repayment and significant at 10% level. The results underscore the need to scale up loan sums advanced to farmers by micro-credit institutions who presently are constrained by low capital base. The Central Bank of Nigeria (CBN) and International NGOs should come up with an intervention fund for informal micro-credit organizations to shore up their capital base. There is also need for policy aimed at free and affordable education to enable farmers access information on better fund management and land re-form policies to enable them more access to land for increased output to enhance loan repayments.