Abstract

C. Y. Ovigwe 1, Osaji G. Anthony*, and Dorye Andrew Bozienghen3

This study was designed to investigate the loan size and repayment performance of smallholder oil palm producers and processors in Nigeria using Abia State as a case study. Ninety respondents, comprising 54 producers and 36 processors, were randomly selected and interviewed. Ordinary Least Square technique was used in analyzing the data and drawing conclusions. The analysis of data revealed that loan size by oil palm processors was significantly determined by processing experience, gross annual income and interest rate. For the farmer-borrowers, the major determinants of loan size were educational level and interest rate all of which fell in line with a priori expectations as indicated by the signs of the coefficients of relevant variables. On loan repayment rate and credit worthiness rating, results of data analysis showed that loanasset ratio and distance between home and source of loan were significant determinants of loan repayment rate.