ISSN: 0041-3216 (Online), 0041-3216 (Print)
Volume 94 Number 3
Do social capital and membership homogeneity characteristics matter in credit markets with joint-liability among rice farmers groups in Nigeria?
Financing poor resource farmers in Africa has been associated with large transaction and overhead costs. The use of social capital and joint liability promises to be a leeway. The paper assessed the performance of rice farmers’ groups to micro finance service based on their social capital and joint liability approach. Primary data were generated through a sampling procedure and analysed using descriptive statistics and Tobit regression model. Results show that Group dynamics with respect to screening of applicants, peer monitoring and membership homogeneity in religious activities had significant effects on group repayment rate. The paper is of the view that groups that have good records in screening of applicants, peer monitoring and homogenous in religion should be funded.
Keywords: Credit risk, gender, social cohesion, micro finance, repayment