Ejike Et Al

Ejike et al

Journal of  Agricultural Sciences

Vol. 3 (
2), pp.137-144,
February 2013

 ISSN: 2276-7770 




DOI: http://dx.doi.org/10.15580/GJAS.2013.2.120512314


Agricultural Credit Risk and Default Management by Banks
in Imo State, Nigeria


Ejike R.D., *Ohajianya D.O., Lemchi J.I.


Department of Agricultural Economics, Federal University
of Technology Owerri, P.M.B 1526 Owerri,

 Imo State,


Corresponding Author’s Email:

dohajianya @ yahoo. com


This study was designed to analyze agricultural credit risks
and defaults management by banks in Imo State. Data were
collected with the use of structured and validated
questionnaire from 12 purposively selected bank branches and
72 randomly selected farmer loan beneficiaries in the state.
Data were analyzed using means, percentages, frequency
distribution and ordinary least square regression model. The
standard deviations determined for riskiness of agricultural
credit to farmers in the three zones (Owerri, Okigwe and
Orlu zones) of Imo State were found to be N187,928.93,
N146,586.56 and N154,805.41 respectively. Results of the
regression analysis show that the related variables;
supervision, viability, collateral, sanction, appraisal, and
insurance are significant credit and default management
techniques employed by banks in the study area in their
course of lending to agriculture. It is therefore
recommended that banks should put in place a comprehensive
credit risk management process to identify measure, monitor
and control credit risk and all material risks and where
appropriate, hold capital against these risks to reduce risk
of delinquencies and defaults, proper education of farmers
on loan acquisition and application demands for appropriate
collateral and enforcement of loan repayment obligations,
recruitment of well trained and motivated staff are
necessary precautions for effective credit delivery to the
agricultural sector.
Keywords: Credit risk, default risk, risk management,
Banks, farmers, Imo State, Nigeria.


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