Farmers Perception of Repayment of Loans

In: Other Topics

Submitted By teenumathew20
Words 2618
Pages 11
© Kamla-Raj 2012

J Agri Sci, 3(1): 21-27 (2012)

Farmers’ Perception of Repayment of Loans Obtained from
Bank of Agriculture, Ogun State, Nigeria
I.F. Ayanda* and O. Ogunsekan**
*

Department of Agricultural Economics and Extension, Kwara State University, Malete, PMB
1530, Ilorin, Kwara State, Nigeria
**
Department of Agricultural Extension and Rural Development, University of Agriculture,
Abeokuta, Ogun State, Nigeria
Telephone: 08033737391; E-mail: iayanda@yahoo.com

KEYWORDS High Interest Rate. Short Payback Period. Low Farm Productivity. Employment Generation. Loan Recovery
Strategies
ABSTRACT This study examined farmers’ perception of repayment of loans in Ogun State, Nigeria. A multi-staged sampling technique was used to select 120 respondents for the study. Descriptive and Pearson Moment Correlation Statistics were used to analyze the data. Results showed that loan beneficiaries were mostly youth. Majority (74.8%) disagreed with the loan payback period of 7-12 months while 74.2% of the farmers perceived loans as grant (not payable). A significant and inverse relationship exist between interest rate (r = -.151; p ≤ 0.05), low farm output (r = -.113; p ≤ 0.05) and loan repayment; a linear relationship exists between age of farmers (r = .715; p ≤ 0.05) and loan repayment. The loans have the potential to create employment in the rural areas. Youth with repayment capability should be given priority in the issuance of loans to farmers.
Officials of Bank of Agriculture should strengthen loan recovery strategies.

INTRODUCTION
Background to the Study
Nigeria is faced with the challenge of providing adequate food supply for its teeming population of 150 million. Food and Agricultural Organization (FAO) has consistently listed
Nigeria among countries that are technically unable to meet their food needs. This is because in most…...

Similar Documents

The Impact of Rural Banking on Rural Farmers in Uganda

... THE IMPACT OF RURAL BANKING ON RURAL FARMERS IN UGANDA. CASE STUDY OF KABALE DISTRICT. BY NAMARA MARTHA 10/U/15158/EVE 210006079 A RESEARCH PROPOSAL SUBMITTED TO THE SCHOOL OF STATISTICS AND APPLIED ECONOMICS FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF BACHELOR OF ACTUARIAL SCIENCE DEGREE OF MAKERERE UNIVERSITY. TABLE OF CONTENTS Contents CHAPTER ONE 4 INTRODUCTION 4 1.0 INTRODUCTION 4 1.1 BACKGROUND TO THE STUDY 4 1.2 STATEMENT OF THE PROBLEM 4 1.3 THE AIM OF THE STUDY. 5 1.4 OBJECTIVES OF THE STUDY 5 1.5 RESEARCH HYPOTHESIS 5 1.6 RESEARCH QUESTIONS 5 1.7 LIMITATION OF THE STUDY 6 1.8 ORGANIZATION OF STUDY 6 1.9 SIGNIFICANCE OF THE STUDY 6 CHAPTER TWO 7 2.0 LITERATURE REVIEW 7 2.1 STRUCTURE AND PERFORMANCE OF RURAL AND MICRO FINANCE INDUSTRY 7 2.2.0 RURAL AND COMMUNITY BANKS (RCBS) 9 2.2.1 SAVINGS & LOANS COMPANIES 10 2.3 NON-GOVERNMENTAL AND COMMUNITY-BASED ORGANIZATIONS 10 2.4 INFORMAL FINANCE 11 2.4.1 MONEYLENDERS 11 2.4.2 TRADERS 12 2.5 GOVERNMENT CREDIT PROGRAMS 12 2.5.1 INTEREST RATES 13 2.5.2 SECURITY 13 2.5.3 THE NEED FOR THE RURAL......

Words: 4723 - Pages: 19

Loan Management

...A-LPM Comptroller of the Currency Administrator of National Banks Loan Portfolio Management Comptroller’s Handbook April 1998 A Assets Loan Portfolio Management Table of Contents 1 1 3 11 13 13 14 15 15 17 19 20 22 22 22 24 24 25 26 27 27 28 29 30 32 33 34 36 36 37 37 38 38 Introduction Overview Risks Associated with Lending Credit Culture and Risk Profile Loan Portfolio Objectives Strategic Planning for the Loan Portfolio Financial Goals Risk Tolerance Portfolio Risk and Reward The Loan Policy Loan Policy Topics Loan Approval Process Portfolio Management Oversight Risk Identification Exceptions to Policy, Procedures, and Underwriting Guidelines Documentation Exceptions Policy and Underwriting Exceptions Aggregate Exception Tracking and Reporting Portfolio Segmentation and Risk Diversification Identifying Concentrations of Risk Evaluating and Managing Concentrations of Risk Concentration Management Techniques Stress Testing Allowance for Loan and Lease Losses Credit Management Information Systems Collections and Work-out Lending Control Functions Independence Credit Policy Administration Loan Review Audit Administrative and Documentation Controls Comptroller’s Handbook i Loan Portfolio Management Communication with Senior Management and the Board Loan Portfolio Management Supervision Asset Quality Reviews Targeted Reviews Process Reviews Administrative and Documentation Reviews Compliance Reviews Follow-up Evaluations on Management......

Words: 27064 - Pages: 109

Sbi Home Loan

...HOME LOAN TAKEOVER OPPORTUNITY AND CHALLENGES Internship Report submitted to SBI in completion of the requirement of Summer Internship at State Bank of India NAME OF THE STUDENT: kushal Shah PROJECT MENTOR/ REPORTING OFFICER AT THE BANK: Mr Kumar APRIL 6th 2013 TO JULY 6th 2013 Acknowledgement I take this opportunity to express my profound gratitude and deep regards to Mr. Bhoir, HR, State Bank of India for giving me the opportunity to take up this project and posing faith in me to fulfill the project  I also take this opportunity to express a deep sense of gratitude to Company Mentor Mr. Kumar, Manager State Bank of India, for his cordial support, valuable information and guidance, which helped me in completing this task through various stages.   I am obliged to staff members of State Bank of India especially Mr. Saraswat & Ms Warrier, HLST Departement, State Bank of India for the valuable information provided by them in respective fields. I am grateful for their cooperation during the period of my assignment.   Lastly, I thank almighty, my parents, brother, sisters and friends for their constant encouragement without which this assignment would not be possible. I am also thankful to all the respondents whose cooperation & support has helped me a lot in collecting necessary information.    Kushal Shah Bottom of Form Table of Contents Sr. no | Particulars | Page no | 1 | 1. Introduction 2.1. Profile of Student 2.2.......

Words: 12002 - Pages: 49

Factors Influencing Credit Default Among Smallholder Farmers

...scarce for smallholder farmers owing to a number of reasons. Credit institutions argue that smallholder farmers involve only themselves and are never willing to work collectively which limits the success of their business to where their skills and knowledge end. The nature of agribusiness itself leaves a lot to be desired as far as agricultural credit is concerned. Most agribusinesses have slow response to price changes, long-term production cycles, seasonality of production and are further susceptible to climate changes which culminate in cash flow problems and low long-term profitability hence posing high risk of default in payment of credit. On another note, though there are numerous credit institutions in Swaziland, loan processing is slow. Business enterprises in the country at times have to wait for months before their loans are approved (Dlamini 2001 in Ngcamphalala 2005). Although, there is an outcry of the scarcity of farm credit for smallholder farmers, other farmers do obtain funding from institutions that offer farm credit either in cash or in kind through the value chain finance instruments. Through some instruments, funds are advanced to farmers to be repaid usually in kind at harvest time yet through some instruments agricultural inputs are advanced to farmers or others in the value chain for repayment at harvest or other time with the cost of credit usually embedded into the price. Still through other instruments sales agreements between farmers and creditors......

Words: 2987 - Pages: 12

Loans & Loan Types with Relevance to the Saudi Market

...other factors that could damage the stability of the bank. (1) Bank's traditionally rely heavily on short-term deposits to fund long-term loans to consumers and businesses. This reliance makes a bank susceptible to major problems if conditions turn against it, or it sees a sudden mass withdrawal of deposits. This is why the FFIEC tries to monitor banks' stability with the UBPR. (1) Loans are one of the main sources of income for most commercial banks. They lend individuals and small to medium sized businesses/enterprises loans and short term financial assets with a predetermined centrally-agreed interest rate in order to operate safely. There are however, different kinds of loans. I will talk about these briefly in my report. i) Real estate loans: Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water. (2) Real estate loans are usually called mortgages. So what are mortgages? “Mortgages are debt instruments, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments. Mortgages are used by individuals and businesses to make large real estate purchases without paying the entire value of the purchase up front. Over a period of many years, the borrower repays the loan, plus interest, until he/she eventually owns the property free and clear. Mortgages are also known as "liens against property" or "claims......

Words: 1369 - Pages: 6

Home Loan

...Home Loan FAQs A. An Introduction to Home loans 1. What is a Home loan? Home loan is the sum of money a bank or financial institution lends you to help you buy your dream home. By taking a home loan from a bank or a housing finance company you pledge your home as the lender’s security for repayment of your loan. The bank or financial institution will hold the title or deed to the property till the loan has been paid back with the interest due for it. Home loans are generally taken for long tenures as the loan amount is usually a huge sum. A home loan can be taken anywhere between 5 and 30 years. The amount of loan one is eligible for is dependent on the individual’s credit profile. 2. What is a down payment? What are the ways in which I can source my down payment? Generally as a thumb rule, banks or financial institutions lend 85% of the cost of the property. 15% of the money is expected to be paid as a down payment for the loan. Opting for a personal loan if you can afford that cost as well, pledging your investments, getting loan against your insurance policy etc. are some ways to liquidate your assets and pay your downpayment. 3. Are there any specific loans available for NRIs? Yes, there are specific loans that are tailored for the requirements of NRIs who wish to build or buy a home in India. 4.What is reverse mortgage? This loan facility allows a senior citizen (above 60 years of age) eligible to apply for a reverse mortgage loan and avail 60% of the value of the......

Words: 4149 - Pages: 17

Loan

...William D. Ford Federal Direct Loan Program Direct Subsidized Loan and Direct Unsubsidized Loan Borrower’s Rights and Responsibilities Statement Important Notice: This Borrower’s Rights and Responsibilities Statement provides additional information about the terms and conditions of the loans you receive under the accompanying Master Promissory Note (MPN) for Federal Direct Stafford/Ford Loans (Direct Subsidized Loans) and Federal Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized Loans). Please keep this Borrower’s Rights and Responsibilities Statement for your records. You may request another copy of this Borrower's Rights and Responsibilities Statement at any time by contacting your servicer. Throughout this Borrower’s Rights and Responsibilities Statement, the words “we,” “us,” and “our” refer to the U.S. Department of Education. The word “loan” refers to one or more loans made under the accompanying MPN. 1. The William D. Ford Federal Direct Loan Program. The William D. Ford Federal Direct Loan (Direct Loan) Program includes the following types of loans, known collectively as “Direct Loans”:     Federal Direct Stafford/Ford Loans (Direct Subsidized Loans) Federal Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized Loans) Federal Direct PLUS Loans (Direct PLUS Loans) Federal Direct Consolidation Loans (Direct Consolidation Loans) 4. About the MPN. You may receive more than one loan under this MPN over a period of up to 10 years to pay for your......

Words: 7507 - Pages: 31

Customer Perception

...Appendices Questionnaire Q1 A STUDY ON CONSUMER BEHAVIOUR TOWARDS ENDOWMENT POLICY OF LIFE INSURANCE CORPORATION OF INDIA AT PERAMBALUR DISTRICT QUESTIONNAIRE I. DEMOGRAPHIC PROFILE 1. Name (Option) 2. Age : : Below 20 51 – 60 3. Sex 4. Level of Education : : Male 21 to 30 31 to 40 41 to 50 61 and above Female Graduate Professional Below School level Post Graduate 5. Marital status 6. Monthly Income : : Married Unmarried Rs.5001-10000 Rs.15001-20000 Below Rs.5000 Rs.10001-15000 Rs.20001 & above 7. Type of Family 8. Occupational status : : Joint Government Student Nuclear Private Housewife Business Farmers II. FACTORS INFLUENCING POLICY HOLDERS 1. Reasons for preference of LIC? Reliability Financially sound Customer oriented Well managed Other facilities New schemes cum attractive bonus Savings 2. Level of awareness of the various types of Endowment plans in LIC? Very High High Moderate Low Very Low Q2 3. The source of buying Endowment Policy? Agent Development officer Direct 4. Number of Endowment Polices taken so far? One Two Three More than Three 5. Periodicity for payment of Premium? Monthly Quarterly Half Yearly Yearly 6. S. No. Which type of Endowment policy you have chosen? Specify the year/period? Sum Annual Assured/Period Premium Mode of pay Monthly/Quarterly/ Half-yearly/Annually Endowment plans New Janaraksha Jeevan Anand Endowment with profits Marriage Endowment / Education Annuity with...

Words: 4719 - Pages: 19

A Research Proposal on Mpact of Rural Banking on Farmers in Bangladesh

...A RESEARCH PROPOSAL ON IMPACT OF RURAL BANKING ON RURAL FARMERS IN BANGLADESH ( MD. IBRAHIM KHOLILULLAH, SYLHET aGRICULTURAL uNIVERSITY,sYLHET, bANGLADESH PHONE:01718996557) INTRODUCTION: Bangladesh is an agro-based country, essentially are endeavoring for rapid development of the country. More or less 80 percent people directly or in directly depend on agriculture for their occupation .But it is a matter of great sorrow that farmers of our country get less facility in agricultural inputs especially agricultural credit. Due to the lack of credit at proper time they cannot produce crops at proper efficiency. So the responsibility of rural banks needs to be increased. Because If current agricultural trends continue, by the year 2020 in Bangladesh food shortage will increase many times, .The lower calorie intake could lead to poverty, malnutrition and hunger. In an attempt to alleviate some of these potential problems, several institutional and non-institutional sources of rural credit have been made available to Africans. It is hoped that, in the long term, credit will enable the poor to invest in agricultural and non-agricultural productive assets, to adopt new technologies and farming methods, and to minimize environmental degradation. Bangladesh, like other developing countries, has traditionally experienced low productivity, low income levels, low domestic savings, unemployment, and malnutrition. The Bangladesh government, through the Bangladesh Bank ,......

Words: 3983 - Pages: 16

Farmer Case

...Case Assignment #1: The Farmer and the Landlord Group Members: Abi Erogbogbo Tierra Pearson _____________________________________________________________ Choice of Contract Structure Advising Farmer Given the volatility and uncertainty associated with farming, the Farmer will be better off with a contract that makes allowance to insure against a poor harvest and financial incentive when the harvest is profitable. An employment contract will be best for the farmer. With employment, the farmer will not be over-burdened with the financial responsibility of paying substantial monthly rent, in a month/period where his harvest has not been profitable. The agreement will depend heavily on the effort, expertise, and harvest of the farmer. This may not be a very attractive option for the Landowner, but if I were advising the farmer an employment contract will be most preferred. Advising Landowner As a landowner, my major objective is to derive the maximum profits from renting/leasing out my land. Land is a fixed asset; hence it should be able to generate a constant cash inflow for the owner. However, if the team were advising a landowner, a constant annuity (i.e. monthly rent) will be the preferred option. This monthly rent will serve as a fixed income for the landowner regardless of how well the farmer’s harvest is doing. With this contract option, the Landowner is protected from the liability that may be incurred if the farmer’s harvest results in a......

Words: 1298 - Pages: 6

A Synopsis on a Study on Customer Perception to Personal Loans with Reference to Corporation Bank in Bangalore.

...SYNOPSIS ON A study on Customer perception to personal loans with reference to Corporation bank in Bangalore. Synopsis submitted in partial fulfillment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION of CMR INSTITUTE OF MANAGEMENT STUDIES (AUTONOMOUS) affiliated to Bangalore University by Ms. Manjunath Vishwanath Hallikeri Register No: 13201015 Under the guidance of E.Geetha Venu Asst. Professor Dept. of Management Program CMR INSTITUTE OF MANAGEMENT STUDIES (AUTONOMOUS) C.A. #2, 3rd C cross, 6th ‘A’ Main, HRBR layout 2nd Block, Kalyana Nagar Bengaluru-560 043 2013-2015 INTRODUCTION PERSONAL LOANS Loans come in all shapes and sizes, but, overall, there are two main types: secured and unsecured loans. The main difference is that a secured loan will use an asset – usually your home – as security, whereas an unsecured loan is available to most people provided they have a decent credit rating and are in employment. A Personal loan is generally taken by borrowers who are looking for loans for quickly and with minimum documentation. In addition, since there is no monitoring of the end use, it gives flexibility to the borrower to use the loan for any purpose they like. A Personal Loan is taken by a borrower for his/her individual wants and needs; it is commonly referred to as an unsecured loan because there is no security/collateral against it. It is also called “All-purpose loan” at times as there is no......

Words: 907 - Pages: 4

Farmer

...Troy Conley Comp 102-16 Professor wood March 7, 2016 To the Farmer in All of Us In this advertisement Dodge Ram is advertising their heavy duty trucks for the ideal farmer. The title of this ad is “Farmer” which is found on YouTube. This advertisement is 2:02 long and appeals to almost all age groups. This Advertisement would be shown before a video that had content of more a masculine attitude. Even though the ad appeals to all genders the audience would not see this advertisement before a makeup video. The target audience is men, woman, or anyone with an adventurous spirit. Because in the video the closing phrase that appears on the screen says, “To the Farmer in All of Us.” This appeals to everyone watching the advertisement. However, the audience does move towards people living in rural areas and places where farming is more prevalent. The need found is that if the audience buys a Dodge Ram Truck then they could be a farmer, but keep their normal day job. The “Farmer” ad for Dodge Trucks has made the consumer think that if they buy a Dodge Truck then they will automatically become a better and stronger farmer. In Dodge’s ad the colors are very moving, the ad does not have moving shot, its pictures going from picture to picture with a narrator describing the ideal farmer. The way dodge describes the ideal farmer is with the people they use. In the ad the people are hard workers who look like they are happy with what they do because they now that they are making a......

Words: 759 - Pages: 4

The Indian Farmer

...India is an agricultural country. Eighty percent of Indians earn their living by working on land. The Indian farmer is the backbone of the Indian society because he feeds us and supplies us with food grains. He provides us with raw materials for cloth, fire-wood and timber. He works very hard from morning to evening. He has to get up early in the morning and plough the land. From the ploughing of the fields he turns to the feeding of the cattle. Hardly does he finish hoeing when he takes to weeding or watering. He takes his breakfast in the fields and works on till noon. He enjoys simple food, fresh air and sound sleep at night. His living depends on the rain god. He is ruined if his crops fail due to lack of rain or drought. He is happy if the harvest is growing. When the crop fails, he borrows money and runs into debt. The Indian farmer spends his life in the lap of nature. An Indian farmer is generally illiterate. He is often used to drinking heavily. Since the freedom of the country, the lot of the Indian farmer is improving. He is being encouraged by the government to improve his lot by increasing production. He is being given loans to buy farm inputs and to have tube wells and pumping sets. Free and compulsory education goes a long way in bringing about a great change. The Indian farmer is growing more, earning more and has a better standard of living....

Words: 257 - Pages: 2

Loan

... PaperTerm PaperThesis Paper Credit Approval, Loan Disbursement & Recovery System In Rupali Bank.Home » Posts » Business » Banking » Credit Approval, Loan Disbursement & Recovery System In Rupali Bank. Credit Approval, Loan Disbursement & Recovery System In Rupali Bank. Subject: Banking, Business | Topics: Assignment Executive Summary Rupali Bank Ltd Postagola Branch was created and commencement of business started on 1988. As a fully licensed commercial Bank, Rupali Bank Limited is being managed by a highly professional and dedicated team with long experience in banking. The Bank has been graded as a top class Bank in the country through internationally accepted CAMEL rating. Rupali Bank Limited offers all kinds of Commercial, Corporate and Personal Banking services covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by Bangladesh Bank. The aim of the Bank is to participate actively in the socioeconomic development of the nation by operating a commercially sound banking system. To accept deposit from the customer and to lend the deposit again to customer is the Prime business of Rupali Bank. The main activities of Rupali Bank are Commercial Banking, Corporate Banking Retail Banking and Islami Banking. Prime Bank’s products can be broadly classified in two groups i.e. Depository product and Loan product. The Rupali Bank Limited is offering different loan and advances products to the client for......

Words: 8626 - Pages: 35

Fundamentals of Loan

...1. Fundamentals of Loan Analysis 1.1 Objectives and Methods of Loan Analysis Loan analysis is to ensure that loans are made on appropriate terms to clients who can and will pay them back. What analysis is needed and what is the most efficient approach to fulfill that need is primarily determined by the type and nature of the loan. • Objectives of Loan Analysis • To place good and appropriate loans -- can the loan generate income for repayment and will the client repay • Determine eligibility of the applicant -- is he/she eligible according to the the program criteria • Training needs and skills -- to assess the training needs and develop the financial management skills level of the client. (This is the basic principal of programs that integrate their credit and training methodologies.) • Program Indicators -- loan analysis may also be used to generate the indicators that will be used to evaluate the impact of the loan. 1.2 What Analysis is Needed? How do we determine what is needed to adequately analysis a loan? What type of information is critical? Some types of loans require more thorough analysis than others. Larger, long-term loans for fixed assets require more thorough analysis than short-term working capital loans. For individual loans, loan analysis and follow-up visits provide most of the guarantee for the institution and thus the analysis is necessarily more extensive. Group loans transfer most of this responsibility to the......

Words: 4915 - Pages: 20