Analysis of Loan Repayment among Small Scale Farmers in Oyo State, Nigeria

Abstract

The study analysed loan repayment among small scale farmers in Oyo State, Nigeria. It specificallyidentified socio-economic characteristics of the respondents and quantitatively determined some socio-economiccharacteristics of these farmers that influence their level of loan repayments. A multi stage sampling technique wasused to select 286 respondents in the study area and structured questionnaire administered on them to collect data.Descriptive statistics was used to analyse the socio-economic characteristics of the respondents while multipleregression using Ordinary least square (OLS) was used to quantitatively determine the socio-economic characteristicsthat influence the level of loan repayment among small scale farmers in the study area. The result showed that60.23% of the respondents were more than 50 years old and 92.35% of them were males. Analysis also revealed that83.92% of these farmers operated 4.9 hectares or less as farmland. About 82.17% of the respondents obtained theirloans from informal sources while 17.83% patronized formal sources. The result of the repayment function showedthat the included regressors explained 68.4% in the variation of the regressand.