Reasons for Delay in Repayment of Agricultural Loan by Farmers in Kwara State, Nigeria

This study highlights the factors causing loan default among farmers in Kwara state. A total of 3100 agricultural loan defaulters (from the members of Kwara State Apex farmers’ cooperatives union) were obtained for this study. The study frame was stratified into four, based on the existing ADP zones. A proportionate sampling technique was used in selecting the 400 agricultural loan defaulters. Data collected with questionnaire were analyzed using descriptive statistics. The result showed that high-interest rate was the reason why farmers default agricultural loan. The view of the agricultural loan desk officers was that miss utilization of loan causes default among farmers. It was concluded that interest rate, family commitment and delay in disbursement were the cause of default from the view of the farmers while miss utilization, political approach and change in business were the what causes default from the points of agricultural loan desk officers. To reduce the incidence of loan diversion, efforts should be made to monitor borrowers regularly so as to ensure they use the loan they received for the agreed and intended use. Getting regular account statement from borrowers and as well as regular visiting the borrowers' enterprise can also enhance this.