Influence of Business Environmental Factors on Credit Repayment among Agricultural Cooperative Members in Nasarawa State, Nigeria

Abstract

Poor credit repayment rates often jeopardise the long-term viability of agricultural cooperatives, which are essential for providing credit in rural areas of Nigeria. Recent studies have theorised that business environmental factors could be responsible for the poor repayment rates. Against this backdrop, this study examined the effect of environmental factors of business on agricultural cooperative members’ credit repayment rate in Nasarawa State, Nigeria. Using a descriptive survey design, data were obtained from a sample of 214 cooperative members and analysed using descriptive statistics and a multiple regression model. On the loan default rate, the results revealed that 50% of members paid back less than 20% of their loans, and 83.6% paid back 40% or less when they were due. Adverse business environment (β = 0.646; p = 0.032), natural disasters (β = 7.207; p = 0.004) and political and conflict circumstances (β = 2.498; p = 0.043) were significant predictors of repayment rate. The study recommends affordable insurance for agricultural cooperatives to mitigate consequences of natural disasters.