Agricultural Credit Repayment Preference among Rural Farmers in Some Rural Communities in Kogi State, North-Central Nigeria

Credit repayment is one of the challenging aspects of agricultural financing, especially in rural communities of developing country like Nigeria. Some of the challenges for any credit provider include lack of tangible collateral among the farmers and the difficulty involved in predicting farmers’ creditworthiness. This study examined repayment preferences among the rural farmers in some selected communities in Kogi State-Nigeria. A total of 100 active farmers were engaged for ten years and were provided with credits in the form of farm inputs (fertilizers, improved seedlings and pesticides). The farmers were divided into two sets: one set to repay input credits received with cash while the second set was to repay with ten per cent of harvested crop for which they received the inputs. The result shows a significant difference in credit repayment preference between the two sets of farmers. The set that repaid with ten per cent of the harvested crops were found to have performed better (measured by the rate of defaults) than the set that repaid with cash equivalent. Therefore, a localize agricultural financing system with the cash and kind repayment options, is recommended for these communities, and similar other communities in Nigeria.