Loan Performance and Repayment Pattern among Members of Cooperative Societies in Egba Division of Ogun State, Nigeria

Published by: Admin

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Authors: Akerele E O, Okewale J A, Ariyo O O and Sofoluwe N A

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Abstract

This study assessed the loan performance, repayment and default among Cooperative Thrift and Credit Societies in Egba Division of Ogun State, Nigeria. Specifically, the study described the socio-economic characteristics of cooperative members in the study area; examined the amount of loan acquired and repaid among the cooperative members; examined the factors affecting loan repayment performance; examined the determinants of loan default among the cooperative members; and identified the challenges you face in repayment of loan. The methodology of the research was made up of the research design which was descriptive and quantitative data which was collected using open and closed ended questionnaires. A multistage random sampling technique was used to select a sample size of one hundred and forty (140) cooperators. The results revealed that majority 70.7% of the respondents were married. Married respondents have more dependents and reliabilities on their business enterprise motivating them to look for credit in order to increase their working capitals and revenue. Majority (92.9%) of the cooperative members passed through primary, secondary or tertiary educational level or had acquired one level of education or another. The average amount of loan applied for, approved, disbursed and repaid by the applicants was N666,618.71, N631,594.20, N625,072.46 and N461.071.22 respectively. The regression analysis on the factors affecting loan repayment among cooperators revealed only age, years of formal education and annual net income had positive significant while household size, marital status and amount of credit received were negatively related. The co-efficient of the variable age, level of education, and marital status are significant and negative in the rate of loan default among the cooperators in the study area. Finally, high interest rate, afraid of default payment and covering long distances to the bank are the major challenges facing the respondents in loan repayment. It is concluded that the financial performance of CTCS has improved through prompt loan repayment. Based on the analysis and findings of this study, it was therefore recommended that Cooperative societies should address the issue of loan repayment performance by monitoring the use that respondents put their loan to as it was revealed in the study that the higher the amount of credit received the lower the loan repayment ability.

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