Tag Archives: Credit

Risk Management, Risk Concentration and the Performance of Deposit Money Banks in Nigeria (Published)

This study investigated the effect of risk management and risk concentration on the performance of Deposit Money banks in Nigeria for the period 1997 to 2016. The study adopted credit risk, liquidity risk and capital adequacy risk as proxies for risk management/concentration, and return on assets as the measure for performance of Deposit Money banks. Secondary data was collected from the annual financial statements of listed banks and the Nigerian Stock Exchange fact book. The study employed multiple regression technique based on the E-views 7 software for analysis of data. The results of the analysis indicated that credit risk and liquidity risk had positive and significant effect on return on asset, while capital adequacy risk had negative and insignificant effect on return on asset. The study concluded that risk management/concentration affected the performance of banks in Nigeria. Based on the findings, the study recommended that the management of banks should establish sound lending policies, adequate credit administration procedure, and effective and efficient machinery to monitor the lending function in line with established guidelines. Also, the character and financial statement of the borrower must be properly scrutinized and a careful evaluation of the customer’s credit worthiness be carried out before extending loan facilities to potential borrowers.

Keywords: Credit, Liquidity, Performance, Returns on Assets, Risk Management, capital adequacy

Assessment of Agricultural Revolving Fund Performance in Rural Uganda (Published)

Access to agricultural credit in rural areas in developing countries is limited and it undermines growth of rural agriculture based economies. The study assessed an agricultural revolving fund performance in terms of access to inputs, repayment for inputs and access to cash loans from farmers’ groups in rural Uganda. Two hundred farmers were interviewed. A structured questionnaire was used to collect quantitative data which was analysed using bivariate and linear regression analyses. The cost of inputs (p = 0.0001, R2 = 0.437), grace period (p = 0.0001, p = 0.0001, R2 = 0.423) and repayment knowledge (p = 0.0001, R2 = 0.406) influenced access to inputs. Location (p = 0.0001, R2 = 0.209), grace period (p = 0.0001, R2 = 0.209) and farmer group experience in savings and credit (R2 = 0.187) influenced repayment for inputs. Interest rate (p = 0.0001, R2 = 0.503) and farmer group experience in saving and credit management (p = 0.0001, R2 = 0.395) influenced access to cash loans. Majority of farmers were likely to access inputs if their cost was lower, the grace period was sufficient and farmers were well sensitized. Repayment for inputs was more successful for longer grace periods, and where the group had savings and credit management experience. Access to cash loans was influenced by interest rate and farmers’ group experience in savings and credit management. Cost of inputs, grace period, knowledge about the revolving fund, interest rate and farmers’ group experience of saving and credit management influenced the performance of the revolving fund significantly. Agricultural inputs given to farmers should be customized to their income levels to improve repayment, the grace period should be at least one year, highest interest rate should be 10% or lower. Beneficiary farmers’ groups should have five years’ experience in savings and credit management.

Keywords: Access, Credit, Farmer Group, Inputs, Repayment

Impact Of Credit On Agricultural Producitivity: A Case Study Of Zarai Taraqiati Bank Ltd (Ztbl) Loans In District Kashmore At Kandh Kot, Sindh Pakistan (Published)

Agricultural sector is the largest contribution to Pakistan’s GDP. Agricultural credit plays an important role in enhancing the agricultural productivity in developing countries like Pakistan. The government of Pakistan introduced several agricultural credit loans through ZTBL and other commercial banks and institutional sources. This study estimated constrains faced by the farmers in acquisitioned source. This study also estimated the impact of credit on agricultural productivity. Data were collected randomly from 30 loanee farmers to three selected ZTBL branches and 30 non loanee farmers in the same villages. It found that the credit has a positive impact on the agricultural productivity and loanee farmers have more gross margins than non loanee farmers. Now the problem is to remove the constraints which small farmers are facing in this regard and then improve the utilization of the credit amount as planned at the time of disbursement in agriculture production process following findings were found. A major proportion i.e.40.8% of the farmers belonged to young age group (36-45 years). It was found that majority of the respondents had low level of education in the selected area. More than 51.7% of the respondents had 6-10 acres of the land holding. A huge majority 95% of the respondents had knowledge about the agricultural credit scheme of the ZTBL Bank. More than 56.75 of the loanees’ farmers avail credit facilities for the first time from the ZTBL bank. A large majority 63.3 of the farmers were not satisfied with the interest rate charged by the banks. It was found that a large number of farmers mutualized the credit amount. About 66.7% farmers got agricultural credit facility from bank without facing any problem. Result indicate that average cultivated area in case of loanee farmers is higher than non-loanee farmers. It was conclude that the loanee farmers had more cost of production as compare to non loanee farmers. Results of regression analysis indicate that credit had very normal impact on agricultural productivity as limiting factors is the proper utilization of loan mount in agricultural sector. The most common utilization of credit amount as construction, repair and renovation of the houses by the loanee farmers.

Keywords: Agriculture, Credit, Farmer, Loan, Producitivity, Zarai Taraqiati Bank

Women Entrepreneurs’ Access to Microfinance Bank Credit In Imo State, Nigeria (Published)

This study examined women entrepreneurs’ access to microfinance bank credit in Imo State, Nigeria. The specific objectives of the study were to: determine the socio-economic characteristics of women entrepreneurs, and determine the amount of credit demanded and the amount of loan accessed by women entrepreneurs from microfinance banks from 2009-2013 and their repayment performance. Hypothesis tested was that socio-economic characteristics of women entrepreneurs do not significantly influence their access to credit. Data collected were analyzed using descriptive and logit analytical tools. Data were collected from 80 loan beneficiaries and 71 non-loan beneficiaries selected from Microfinance banks with the aid of two sets of questionnaire. This study identified Microfinance banks as a major source of formal credit to women entrepreneurs with 80.26% of the overall credit requested accessed and repayment performance of 83.41%. Microfinance banks should create incentives to increase women entrepreneurs’ access to credit and loan repayment.

Keywords: Access, Credit, Repayment Performance, Women Entrepreneurs

Relationship between Financial Inclusion and Economic Growth in Nigerian Rural Dwellers (Published)

Financial inclusion as the provision of a broad range of high quality financial products such as savings, credit, insurance, payments and pensions, which are relevant, appropriate and affordable for the entire adult population especially the low income segments of the economy. This study critically examines the sustainability of financial inclusion to rural dwellers in Nigeria using descriptive study and content analysis. The study observed that the sustainability of financial inclusion to rural dwellers in Nigeria remains the mainstream for economic growth in any country. The implication of this study is that economy cannot grow fast without proper implementation of financial inclusion to rural areas in Nigeria. The study recommended that the promotion of collaboration between Deposit Money Banks (DMBs), Microfinance Banks (MFBs) and Communication services providers for enhanced intermediation of financial services should be encouraged; there is need to educate rural dwellers on the importance of banking as it would facilitate the success of CBN financial inclusion policy and that since some of the rural dwellers preferred to keep money under their pillows at home, there should be proper enlightenment to change their orientation on financial inclusion in Nigeria.

Keywords: Credit, Financial Inclusion, Rural Dweller, Savings, economic growth


This paper analyses the impact of credit on the performance of SMEs in Sokoto metropolis the capital city of Sokoto State of Nigeria. This research is important in the sense that it may provide feedback on government programs and policies on SMEs finance. The research uses primary data collected from 294 respondents out of a population of 1710 registered SMEs in Sokoto metropolis using the random sampling technique. Regression analyses were used to analyse the data. The result shows credit is a major determinant of employment generation of SMEs. It is therefore recommended that is that policy makers should continue to formulate policies that will compile banks to increase credit to SMEs and reduce interest rate on the loan.

Keywords: Credit, Performance, Return on Assets, Small and Medium Scale enterprises., employee total assets ratio.

The Construction Industry and its Linkages to the Ghanaian Economy-Polices to Improve the Sector’s Performance (Published)

The study suggests that the construction sector plays a leading role in the improvement of socioeconomic conditions and the built environment in every country. The study revealed that the construction sector remains as one of the key sectors in the economy in terms of its share of GDP (i.e. 9.1% for 1993- 2011 period) and the overall industrial output( i.e. 35.9% for 1993-2011 period). Also, the paper estimated Construction Sector Index for Ghana for the first time and the index revealed that construction sector has improved significantly over the past two decades. Similarly, some empirical evidence from the econometric estimation using the Engel Granger Causality and Johansen Co-integration methodologies confirmed the evidence that the construction sector activity promoted economic growth in Ghana and the relationship remains positive. Finally, the paper concluded that, the construction sector when given the needed push in terms of capacity building, good policy initiatives and regulatory guidelines can provide the necessary impetus for socio-economic development in Ghana.

Keywords: Construction Index, Credit, GDP, Industry Output and Economy