Why Worry About Informal Money Lenders Patronage? A Research Agenda: Evidence From Delta State, Nigeria

Authors : Theophilus Miebi GBIGBI

Pages : 71-78

View : 22 | Download : 12

Publication Date : 2019-04-01

Article Type : Research Paper

Abstract :Credit access will propel economic activities to increase the performance of the farmers to move from everyday for survival to planning for the future. This study assessed informal money lenders patronage by farmers in Delta State, Nigeria. Multistage random sampling procedure was used in the study. Primary data were obtained from 240 borrowers using structured questionnaire and interview schedule. Descriptive statistics, t-test and probit regression analysis were used for the analysis. The result of the study indicated that 54.9% of borrowers had an age range of 34-53 years. Majority of the borrowers were males insert ignore into journalissuearticles values(77%);, married insert ignore into journalissuearticles values(78.8%);, educated insert ignore into journalissuearticles values(96%); with household size of 1-5persons insert ignore into journalissuearticles values(48%);. About 59% had farm size of less than one hectare while 49.6% of borrowers earned income less than N 100,000. The result of the probit regression analysis showed that patronage of informal money lenders were influenced by education, occupation, household size, farm size, marital status, effectiveness and location. The result of t-test confirmed that there was significant relationship between socioeconomic characteristics of smallholder farmers and informal money lenders patronage in the study area. The result indicates that loans from informal money lenders have helped overall performance. The major constraints of borrowers were high interest rate, small volume of cash disbursed and collateral requirement. This requires government’s intervention through the regulation of the activities of informal money lenders with respect to interest rate charged so as to reduce debt burden worries among small-scale farmers.
Keywords : Probit, money lender, patronage