Analysis of Determinant Factors to Loan Repayment among Broiler Farmers in Enugu State, Nigeria

The repercussions of animal protein origin deficiency to the lives of the people particularly children under the ages of five years old and pregnant women in rural areas of sub- Saharan Africa is of major concern to policy makers, researchers and government (FAO, 2015). The high prices of animal protein particularly conventional animals like cattle, sheep and goat meats has made its’ consumption  to be more restricted to the rich, while the less privileged ones seldom  has it in their menus (Kughur, et al.2012). This setting is capable of hampering the millennium development goal of meeting the average of 120kg animal protein intake per day as recommended by FAO as against freighting low (3.24g) that is often reported in the developing countries (Kusina and Mhlanga, 2000; Ume, et al 2016). Nevertheless, the low intake of protein is capable of predisposing mostly these vulnerable to weight loss, weakness, fatigue, poor appetite and anemia (FAO, 2015). Among the economy livestock that is capable of bridging the wide gap in dietary protein intake in most developing countries is broiler, a  sector of poultry  (Nwaru and Nwaeke, 2008; Ume, et al; 2013). The intrinsic features of  broiler which endeared it as a veritable way of alleviating animal protein deficiency in Saharan Africa;  include having fast growth rate, high feed conversion efficiency, ability to be marketed at different ages, low production cost per unit in relative to other types of livestock,  has tender meat and commonly used in ceremonies compared to other birds and has short production circle (Kughur, et al. 2012; Ezeano, et al. 2017). Furthermore, it is palatable and generally acceptable across nearly all cultural and religion boundaries , early maturity compares to most breeds of livestock and make economic proceeds within comparatively short time of about 10-12 weeks (FAO, 2015).Studies inferred that broiler constitutes more than 18% of animal proteins consumed in urban areas of Nigeria with more than 28% also produced in same urban area (Kusina and Mhlanga, 2000, Nwaru and Nwaeke, 2008). Literature showed that broiler farmers are faced by myriads of problems, include lack of skills and equipment to produce, high cost of feed, high cost of day old chicks, fluctuation in market prices, poor breeds of day old chicks, high cost of building materials, high cost of labour and access to credit (Ume, et al; 2013; Ezeano, et al; 2017).

Credit as asserted by Oladeebo and Oladeebo, (2008) is the ability to acquire goods and services or money in swap for pledge for payment in future. The important of credit to agricultural development cannot be overemphasized. Agricultural credit is capable of improving the growth of agriculture through use of new technologies, strengthen the position of the farmers in dispensing his/her livestock, cushioning the effects of seasonal price disparity and enhanced bargaining power, adopt improved agricultural practices and thus boost production ethics, improves output and advances standard of living  of people by breaking vicious cycle of poverty(Duong and Izumida, 2002, Chaudhary and Ishfag, 2003), enhances access to improved inputs, improves consumption and expenditure especially during off-season period, boast access to basic social service, boast farmers’ welfare through limitless access to vital social services and improves high production efficiency for output maximization (Chloupkova and Bjønskov, 2001; De-Graft, and Addo, 2011). Studies showed that the farmers apart from their personal savings, formal institution has been the major access to credit as their activities are monitored by government (Lawal, et al. 2009; Osuntogun, 2012) and to debunk shylock loan often associated with informal sector lending institution (De-Graft and Addo, 2011). The prominent among formal credit lending institutions available to the farmers were Agricultural Credit Guarantee Scheme (ACGS), the Nigeria Agricultural and Cooperative Bank (NACB), microfinance and commercial banks (Lawal, et al; 2009; Ibrahim and Aliero, 2012). In addition, the informal sources available to the farmers were money lenders, personal savings, friends and Rotating Savings and Credit Associations (ROSCAs) (Anozie et al; 014).The low repayment of formal institution among farmers have been problematic that most formal sector lending institution often decline in lending to such farming class through use of an uphill conditions for acquisition and use of the loan (Osuntogun, 2012). However, the default or delinquency in repayment of agricultural credit by the farmers could be linked to the inherent nature of agriculture as relates to risks and uncertainties in output production and prices, resulting in poor economic returns to farming households (Chloupkova and Bjønskov, 2001). Research show that the determinants of loan repayment defaults in rural banking and semi financing institutions among low income and individual-based lending schemes can be checkmated through direct monitoring, regular repayment schedules, and the uses of non-refinancing threats without requiring collateral and without using group lending contracts that feature joint liability (Chaudhary and Ishfag, 2003).