Abstract

Umoren A. Akpan, Edet J. Udoh and Sunday B. Akpan

This study analyzed factors influencing defaults in loan repayments among agricultural credit guarantee scheme (ACGS) loan beneficiaries in Akwa Ibom State using Tobit model. A total of 109 ACGS loan beneficiaries were randomly sampled from the study area. Analysis of data using the model revealed that 12 explanatory variables namely: age of the beneficiaries, family dependency level, total farm cost, farm income, time interval between loan application and disbursement, other loan schemes, visits by credit officers, loan duration, government policies, years of experience, loan size and average interest rate charged were significant variables influencing default in loan repayment among the beneficiaries in the study area. The study recommended that efforts should be directed towards promoting a good credit culture and discipline through client education and moral persuasion.