SOCIO-ECONOMIC AND INSTITUTIONAL FACTORS AFFECTING LOAN REPAYMENTS RATE OF MICRO-FINANCE INSTITUTION (MFIS) AND THEIR BENEFICIARIES IN NIGER STATE, NIGERIA

Abstract

The study focuses on the socio-economic and Institutional determinants of loan repayment rate of microfinance Institution and their beneficiaries in Niger State, Nigeria. The objectives of the study were to highlight the socio-economics characteristics of the respondents and determine factors affecting the repayments rate of the microfinance institutions in the study area. A multistage sampling techniques was used for the study to draw up the respondents, and 144 respondents were interviewed using questionnaires. Similarly, the respondents were drawn from 36 microfinance institution in the study area. Also, 2 executive members from each of the institutions were also interviewed. Data were analyzes using both descriptive statistics and multiple regression model. The results of the analysis reveals that most of the beneficiaries of these institutions 67.4% were female and were married couple 71.5%. The mean age of the respondents was 41.12years. Average family size of the respondents was 8 people. Most respondents also had modern education 70%. Crop farming, poultry farming, artisans and trading were the major occupation of the beneficiaries and have been in these business for over 11years for most of the clients. Capital turn-over base for most beneficiaries was N 114,000.00-N144,000.00 which suggest that they were small-scale business operators. The results of the regression analyses show that the determinants of repayment rate of the beneficiaries of the microfinance institution in the study area includes loan size, dependency ratio, educational attainments, age of the beneficiaries/institution, types of enterprise operated, level of experience, profitability index, interest rate, outreach of the institutions, etc. It was however recommended that extension education, provision of infrastructure, manpower training etc; should be provided for the beneficiaries in the stud area.