Causes and Measures for Controlling Loan Default among Agricultural Cooperatives in Bune State, Nigeria

The studies analyzed the causes and measures for controlling loan default among agricultural co-operatives in Benue State of Nigeria. Data were collected from 130 respondents using structured questionnaire, and was analyzed using descriptive statistics. The result shows that factors responsible for loan default were classified into Institutional, Client-related, Geo-economical, and Market related factors. Late disbursement of (92.31%), lack of loan monitoring (76.92%), inadequate loan appraisals (69.23%), and lack of clear cut policy on lending (69.23) were the institutional factors responsible for loan default. Lack of integrity (80.77%), poor business practice (78.46%), and loan diversion (50.0%) were client-related factors. Death of client (70.77%), economic downturn (55.38%), and natural calamity (52.31%) were geo-economic factors, while, lack of market information (81.54%), market location (49.23%) and wrong economic decision (40.77) were market related factors. The result also showed that obtaining information on borrowers' integrity (92.23%), and training of borrowers on the terms and conditions (82.54%) were main measures to control loan default in the study area. Information on client integrity, and training of borrowers on terms and condition of loan before loan are granted were found to be best measures to control loan default. It was recommended that sound and flexible lending policies measures which must be reviewed frequently by the Central Bank of Nigeria (CBN) and Bank for Agriculture and Agricultural Co-operatives (BAAC) be put in place in order to curtail bureaucracies involved in the management approvals and disbursement of agricultural loan should be formulated. This will ensure early disbursement of funds to co-operative members.