ABSTRACT

This study is an analysis of the determinants of loan repayment and Credit worthness by farmers in Abia Slate under the Nigerian Agricultural Co-operative and rural development bank (NACRDB). Data used in this research were obtained through the use of structured questionnaires and personal interview with farmers who are NACRDI3 loan beneficiaries. Information was sought on socio-economic variables. household income, supervision rate, Asset holding, total operating expenditure, problems and solution of loan repayment. The data collected were analyzed by use of statistical techniques like frequencies, percentages, multiple regression analysis and discriminant function analysis. The result shows that factors that influence loan repayment include sex, age of farmers, educational level, farming experience, household size, annual house hold income, farm size, supervision rate, amount of loan borrowed, loan period, interest rate and distance between home and source of loan. However, the effects of these factors on loan repayment shows that amount of loan borrowed and annual income were positive at 5°/h and I O% significant level respectively while distance between home and loan source was negative at 5% level' of probability. 1-lowever, the discriminant function analysis shows that variables like thriving experience, total operating expenditure income ratio, farm size, level of education and age of farmers macic positive contributions to creditworthiness while outstanding loan total asset ratio, loan total asset rat ratio distance between home and loan source made negative contribution to credit worthiness. The result also Shows that 22.5% of the 40 farmer known to he relatively credit worthy are not credit worthy while  26.0% of the So Farmers known to be relatively non-credit worthy are credit worthy. The group case correctly classified was 75.6%. The major problem with loan repayment with the batik is the delay in loan approval by Zoilal offices while the least problem is low managerial ability. It is however recommended that improvement should be made in the time and disbursement of loan, gestation period should be increased and released of adequate fund and opening up of rural branches of  banks to improve contact with farmers.