Farmers’ Social Life that affect Loan Repayment: A Study of Cocoa Farmers in Ikom Local Government Area of Cross River State

The social life of cocoa farmer that affect loan repayment capacity was studied. From all cocoa farmers in Ikom, 70 farmers whose farm size measured up to five hectares and who made use of loan during the 2004 farming season were purposively sampled for the study. Social factors as age, household size, level of education, farming experience and marital status as dummy variable were regressed on loan repayments. The objective was to identify those social factors that affect loan repayment and to determine the significance of these social factors on loan repayment. Age, household size and farming experience were significant while level of education and marital status were insignificant. The work recommends that age, household size and farming experience of a farmer should be considered as necessary criteria for loan disbursement. Background and Problem Nigerian agriculture is characterized by use of crude tools and implements, low output, low returns, low level capacity to satisfy the food and fibre needs of the nation and hence low income, low savings and investment – the viscous poverty cycle. Meaningful agricultural development requires transformation from traditional to modern technique. This in turn, demands investment of capital. The majority of farmers in this country is poor and cannot on their own meet the level of financial demands of their farms. The remedy often perceived is to seek for loan. Credit, has therefore become a significant feature in this sector of the economy. Borrowing creates debts, which must be repaid or carried over as liabilities that often reduces credit image. Various social characteristics are expected to influence the repayment of loans by farmers. Balogun and Otu (1991) remarked that in small holder farming, credit use and repayment capacity is determined by household size. Arene (1990) and Mejieha (1991) found age to be significant in loan repayment. Objective of the Study The objective of this study is to examine the effects of some social characteristics of the cocoa farmer borrower that affect his/her loan repayment capacity. The specific objectives are to: i. identify the social factors that affect loan repayment ii. determine the significance of the social factors on loan repayment, and iii. state the economic/policy implications of the study.