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Targeted Sensitization as a Strategy to Reducing Loan Default in Microfinance Bank Operations in Yola, Adamawa State, Nigeria
Shuaib Jalaludeen, Ferdinand Che, Fatima Jalal-Eddeen
Open Access Library Journal (OALib Journal) , 2018, DOI: 10.4236/oalib.1104275
Background: In Nigeria and other developing countries, the main reason for poverty and uneven income and wealth distribution is low economic growth performance and low labor returns amongst others. The growing gap between the rich and the poor in the developing countries is alarming hence the need for government and policy makers to focus more toward ensuring a fair distribution of wealth among its populace. Although progress has been made toward poverty reduction in Nigeria, still more needs to be done to narrow this unacceptable gap so as to achieve the needed economic and social growth for society to thrive. In an attempt to address this gap, the central bank of Nigeria came up with the microfinance policy in 2004 and the sole purpose was to give micro, small and medium enterprises access to informal financial services to boost their capacity towards economic growth and development. However, the biggest threat to operations of the microfinance institutions is loan default, a situation where the clients do not fulfill payment of their credit facilities when due. Methods: This mixed method cross-sectional study used a questionnaire to collect responses from eligible persons. The participants in the survey are clients from three randomly selected microfinance institutions in Yola, Adamawa State, Nigeria. The collated data were analyzed using SPSS version 24 and simple Microsoft Excel to look at reasons for defaulting loan repayment and whether targeted sensitization has any significant role in reducing loan default rates. Results: Out of the 150 (100%) questionnaires distributed, 70 (46.7%) were returned and used for the analysis. Reasons for default in repayments revealed short repayment period (40%), multiple loans (11.43%), high-interest rates (2.86%), family obligations (20%) and poor business turnover (25.71). Of the 52.86 percent of the respondents who claim they were contacted by their respective microfinance institutions for sensitization programs, 94.74 percent found the sensitization program helpful. Conclusion: This study has underscored the importance of targeted sensitization as an important strategy in reducing loan defaults in microfinance operations. Similarly, there is the need for further studies to look at the impact of multiple borrowing on loan repayment by the clients.
Analysis and Computation of the Performance of Micro Finance Banks in Nigeria---A Case Study of Standard Microfinance Bank, Yola  [cached]
Ngutor Nyor,Adeyinka Adesuyi Falaye,Elijah Onah,Agnes Nyor
Progress in Applied Mathematics , 2013, DOI: 10.3968/j.pam.1925252820130501.1997
Abstract: This paper deals with the analysis and computation of the performance of Microfinance Banks in Nigeria in terms of credit performance, portfolio growth, link relative portfolio growth, and categorization of portfolio, food security and employment generation using a case study of Standard Microfinance Bank, Yola. The withdrawal of licenses from 103 out of 407 listed Microfinance Banks in Nigeria was a concern to the researcher, being that Microfinance institutions are the major financial servers to the majority of Nigerians who are low income earners that are hardly served by the commercial banks. Using a standardard computer package, the chi-square test application shows that, although the portfolio growth of Standard Microfinance Bank Yola is not averagely 50.20% as claimed by the bank, there is an appreciable growth of 28.96%. But again, with 2005 as the base period, it recorded all time high link relative total portfolio growth of 548%. And other indices such as credit performance of the bank and portfolio by category indicate that microfinance banking in the country may be heading to the right direction except for grossly inadequate portfolio allocation of 6% for Agriculture which is supposed to be in the driving sit of the food security and employment generation. In trying times for institutions such as Microfinance Banks which bear benefits to the masses, it is recommended that either or both the regulatory body or/and the institution should publish a hope-giving-information that will dispel the possibility of the public completely losing hope in such institutions. And also calculated attempt be made to reform the land use act of March 1978 coupled with insurance provision for farmers to ease access to fund.
From No Collateral No Loan to No Collateral No Default : The Economics of Group Lending Microfinance
ASM Rejaul Hassan Karim Bakshi
The Social Sciences , 2013,
Abstract: In this study, we are exploring the economic mechanism that makes group lending microfinance working to extend loan to the poor without collateral while ensuring repayment. In group lending microfinance, MFIs are lending the poor without collateral and the borrowers who pledge no collateral repay loans whenever they are able to. The point is interesting from the fact that if the borrower defaults, she would have to loss almost nothing since, there is no collateral. The reality is, however, that MFIs extend loans without collateral and are rewarded with higher repayment rates. Having no-pledgeable assets by the poor neither prevents MFIs to extend loans nor does it leads borrowers to simply default. This study aims at exploring the economic mechanism through which group lending works. We see that joint liability group lending promotes peer monitoring, eliminates shirking in the group and ensures effort from the borrowers which in turn promotes repayment. We also, find that if loans are associated with dynamic or progressive lending, that is, if successful repayments are rewarded by a larger new loans, we do not need joint liability obligation to ensure repayment. Group lending microfinance with or without joint liability, we thus see, has certain mechanism that leads to assortative matching of borrowers, reduces effective interest rate, leads to peer monitoring and finally enforces repayment as long as borrowers are able to.
Recommended Fertilizer Levels on Bambara Groundnut (Vigna subterranea (L) Verde) in Yola Adamawa State, Nigeria
M.D. Toungos,A.A. Sajo,D.T. Gungula
Agricultural Journal , 2013,
Abstract: Research was conducted during the 2002, 2003 and 2004 cropping seasons at the Federal College of education Teaching and Research Farm. The experiments were located within latitude 9019’N and longitude 12030’E, at an altitude of 185.9 m above sea level. The research was conducted on 2 cultivars of bambara groundnuts Vigna subterranean (L) Verde), cream and variegated with the aim to determine the recommended fertilizer levels on bambara groundnut in Yola Adamawa State, Nigeria. Soil samples were collected at different spots within the experimental sites before and after harvesting every year by throwing a quadrant and collecting 0-15 cm depth of soils, which was subjected to Laboratory analysis. Four levels of single super phosphate fertilizer at 0, 30, 60 and 90 Kg ha-1 of P2O5 coded L1, L2, L3 and L4 were used. Establishment counts and growth parameters on number of plants/stand, plants heights and leaves numbers, fresh and dry weights of the crop, root length, nodules number and yield in kg ha-1 as affected by P2O5 levels were determined. During the three years of experimentation, it was observed that fertilizer application at the rate of 60 kg ha-1 of P2O5 gave the highest yield of 432.5 kg ha-1, even though the fertilizer level at 90 kg ha-1 gave higher yield in some treatments, it was found not to be economically profitable. Therefore, based on the results the fertilizer level of 60 kg ha-1 of P2O5 is recommended for bambara groundnut in Yola, Adamawa State Nigeria.
Groundwater Quality Assessment for Domestic and Irrigation Purposes in Yola, Adamawa State Northeastern Nigeria  [PDF]
Hong, Aliyu Haliru
American Journal of Engineering Research , 2013,
Abstract: To assess groundwater quality for domestic and irrigation purposes in Yola Adamawa State during the peak of dry season, groundwater samples were collected for analysis from fifteen boreholes and five hands dug wells that cover twenty wards of the City. The area investigated falls within longitude 12o26' E and Latitude 9o16' N. The groundwater samples collected were analyzed using Atomic Absorption Spectrophotometer (AAS), multi – analyte photometer and flame photometer while interpretation of the results was done by Comparison with the World Health Organization (WHO) and the Nigerian Standard for Drinking Water Quality (NSDWQ) guidelines for portable water. The pH values ranged from acidic to slightly alkaline 5.5 – 7.4, turbidity recorded 0 – 40NTU with four samples above the limit of 5NTU.TDS and EC recorded values ranged between 17 – 1200mg/l, 129 - 1600μs/cm with two samples each above stipulated limit. The concentrations of the cat ions (Ca, Mg, Na, and K) are all found below the guideline of WHO and NSDWQ. Sulphate and bicarbonate recorded value range of 2 – 94.1mg/l and 11 – 630mg/l, which are also below the value of 100mg/l and 1000mg/l set by NSDWQ and WHO standards; however the recorded value of nitrate exceeded the specified limit of 50mg/l in seven water samples. Five water samples are classified as hard water based on the limit of 150mg/l and 500mg/l total hardness classification by the limit under consideration. The concentrations of heavy metals cadmium, lead, chromium, copper, manganese and iron were all found to exceed the WHO and NSDWQ standards. Iron concentration exceeded 0.3mg/l in seventeen water sample, manganese concentration exceeded 0.2mg/l and 0.05mg/l in twelve water samples, lead exceeded the limit of 0.01mg/l in seven water samples, also, chromium and cadmium exceeded limits of 0.05mg/l and 0.003mg/l in four and six water samples, copper exceeded set limit in only one sample while Nickel concentration exceeds in two water samples; others are beyond detection level. In all, concentration of heavy metals in groundwater is in the order Mn >Fe > Pb > Cd > Cr > Cu > Ni. The implication of the elevated levels of heavy metals in some samples of groundwater is a serious cause for concern to public health. Most of the groundwater samples are good and can be used for irrigation with adequate soil management
Loan Administration by Microfinance Bank to Farmers in Isoko South Local Government Area, Delta State, Nigeria  [PDF]
Ebewore, S. O.
International Journal of Economic Development Research and Investment , 2010,
Abstract: The survey evaluated loan administration by Microfinance Bank (I.C.Global MFB) to farmers in Isoko local government Area of Delta State, Nigeria. Ninety farmers and ten bank officials were selected for the study using simple random and purposive sampling techniques with the aid of a structured questionnaire to obtain data for the study. Various descriptive and inferential statistics such as percentages, frequency distribution, mean, and regression analysis were used to analyze the data. The findings indicated discrepancy between actual amount of loans disbursed to farmers and what farmers desired, most beneficiaries obtain loans less than N200,000.00 and the time of loan disbursement affected farming activities. Based on the findings, it was recommended that overemphasis on collateral should be reduced, male and female farmers should have equal access to loans and should be made available to farmers at the right time.
Effect of Some Environmental Factors on Incidence and Severity of Angular Leaf Spot of Cotton in Yola and Mubi, Adamawa State, Nigeria  [PDF]
N. Z. Tuti, H. Nahunnaro, K. Ayuba
World Journal of Engineering and Technology (WJET) , 2015, DOI: 10.4236/wjet.2015.33B004

Environmental factors such as relative humidity and rainfall generally have been found to increase the incidence, rate of spread and severity of diseases thereby reducing yield of crops. Study was conducted on five cotton varieties, which were artificially inoculated with bacterial blight pathogen to determine the effects of rainfall and relative humidity on incidence and severity of angular leaf spot (ALS) and yield of seed cotton in Yola and Mubi. Results showed that the severity of ALS was higher in Yola (58.65%) at 13 WAS assumed to be due to higher relative humidity range of 76% - 87% and low rainfall of 2 - 40.6 mm. This is assumed to have favoured disease development as against that of Mubi location which recorded lower severity (51.11%) due to lower relative humidity (42% - 55%) and rainfall (37 - 73 mm). Results further revealed that at 13 WAS, SAMCOT-8 had low incidence (66%) and severity (39%) in Yola. This was against the much higher corresponding incidence and severity of 82% and 42% respectively that was observed in Mubi during the same period. SAMCOT-10 and SAMCOT-9 varieties were found to be highly susceptible to the disease at the same period. SAMCOT-8 recorded the highest yield of 390.00 kg?ha?1 in Yola and 868.09 kg?ha?1 in Mubi while the lowest yields of 227.17 kg?ha?1 was observed on SAMCOT-10 in Yola while 461.61 kg?ha?1 was obtained on SAMCOT-9 in Mubi. The variation in yield among these varieties might be due to the differences in their reactions to the disease. There is a need to conduct further trials in these locations to confirm the level of resistance or other aspects of these varieties to the disease.

Predicting Multiple-Borrowing Default among Microfinance Clients  [PDF]
Kanish Debnath, Priyanka Roy
Theoretical Economics Letters (TEL) , 2018, DOI: 10.4236/tel.2018.810116
Abstract: In order to control over-indebtedness that often leads to capacity failure, the Reserve Bank of India recently issued directives for Micro Finance Institutions to restrict multiple loans to borrowers. These institutions are also required to regularly share their current borrowers’ loan records with a Credit Information Company. We argue here that ex-post loan record verification is inefficient and inadequate considering the socio-economic and informational asymmetries in micro-credit markets. Instead, we reason, household characteristics can predict multiple-borrowing behaviour. Our empirical analysis shows that this is true to some extent. We dwell on policy implications and ways to improve our model.
Repayment Flexibility Can Reduce Financial Stress: A Randomized Control Trial with Microfinance Clients in India  [PDF]
Erica Field, Rohini Pande, John Papp, Y. Jeanette Park
PLOS ONE , 2012, DOI: 10.1371/journal.pone.0045679
Abstract: Financial stress is widely believed to cause health problems. However, policies seeking to relieve financial stress by limiting debt levels of poor households may directly worsen their economic well-being. We evaluate an alternative policy – increasing the repayment flexibility of debt contracts. A field experiment randomly assigned microfinance clients to a monthly or a traditional weekly installment schedule (N = 200). We used cell phones to gather survey data on income, expenditure, and financial stress every 48 hours over seven weeks. Clients repaying monthly were 51 percent less likely to report feeling “worried, tense, or anxious” about repaying, were 54 percent more likely to report feeling confident about repaying, and reported spending less time thinking about their loan compared to weekly clients. Monthly clients also reported higher business investment and income, suggesting that the flexibility encouraged them to invest their loans more profitably, which ultimately reduced financial stress.
Microfinance  [PDF]
Ranjana M.Chavan
Golden Research Thoughts , 2013, DOI: 10.9780/22315063
Abstract: Microfinance sector has grown rapidly over the past few decades. Nobel Laureate Muhammad Yunus is credited with laying the foundation of the modern MFIs with establishment of Grameen Bank, Bangladesh in 1976. Today it has evolved into a vibrant industry exhibiting a variety of business models. The microfinance sector is having a healthy growth rate, there have been a number of concerns related to the sector, like grey areas in regulation, transparent pricing, low financial literacy etc. In addition to these concerns there are a few emerging concerns like cluster formation, insufficient funds, multiple lending and over-indebtedness which are arising because of the increasing competition among the MFIs.
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