Determinants of loan repayment patterns among Micro Agricultural Financial Institution of South Africa beneficiaries in North West Province, South Africa

Idowu Oladele, Lucky Ward


This paper examined the determinants of loan repayment patterns among Micro Agricultural Financial Institution of South Africa beneficiaries in North West Province, South Africa. A simple random sampling technique was used to select 280 respondents from a total of 344 beneficiaries. A structured questionnaire was used to collect data which was analysed using the Statistical Package for Social Sciences (SPSS) with frequencies, percentages and probit regression. Majority of the farmers were males (86.8%), 71.4%, had secondary level school of education. A probit regression analysis was used to analyse factors affecting the repayment of loans, and the results showed that income from crops (t = -2.75; p = 0.006) is significant at 1% and has a negative coefficient. Other sources of income (t = -5.133; p = 0.000) is significant at 1%. The results further show that there were significant indirect relationship between financial capital and social capital (t = -7.106; p = 0.000) after MAFISA loans and loan repayment (t = -7.11; p = 0.000). The other significant variables are membership of organisation (t = -2.281; p = 0.023) and frequency of extension contact (t = -3.836; 0.000), and they are significant at 5% and 1% respectively.

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