Socio-Economic Determinants of Loan Repayments Among Agricultural Microcredit Finance Group Members in Makurdi Metropolis of Benue State, Nigeria

ABSTRACT
This study examined the determinants of loan repayment among microcredit finance group members in Makurdi Metropolis of Benue State, Nigeria. To identify these determinants, a total of 48 microcredit groups and 300 group members were randomly selected using a multi-stage random sampling technique. Data were collected through the use of a structured questionnaire. Statistical tools such as simple descriptive statistics (tables, frequencies, percentages, and means) and multiple regression analysis were employed for data analysis.
The results revealed that females constituted 70% of the microcredit group members in the study area, while 73% of the respondents had household sizes ranging from 6 to 10 persons. The groups had existed for an average of 8 years, with a mean membership size of 13 persons. Furthermore, loans carried an average interest rate of 40% per annum and an average duration of 6 months.
The regression analysis identified several factors as significant determinants of loan repayment among microcredit group members. These included age (C₁), household size (C₂), household income (C₃), educational level (C₄), amount of credit received (C₆), length of stay in the locality (C₇), distance to credit source (C₈), supervision, and disbursement lag (C₁₀). The variables interest rate (C₅) and duration of group existence (C₉) were found to have no significant effect on loan repayment. The coefficient of interest rate was negatively related to loan repayment, while the coefficient of duration of group existence was positive but not statistically significant.
The study concluded that agricultural microcredit finance groups should pay careful attention to the significant determinants of loan repayment to enhance the viability, sustainability, and overall repayment performance of their credit programs.