Tobit Analysis of Factors Influencing Loan Repayment Performance: A Case Study of Lift Above Poverty Organization (LAPO) Micro-Credit Agency in Nigeria

Olatomide Waheed Olowa; Omowumi Ayodele Olowa

doi:doi:10.11648/j.ml.20170306.11

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Tobit Analysis of Factors Influencing Loan Repayment Performance: A Case Study of Lift Above Poverty Organization (LAPO) Micro-Credit Agency in Nigeria

Olatomide Waheed Olowa, Omowumi Ayodele Olowa

Published in Mathematics Letters (Volume 3, Issue 6)

Received: 28 January 2017 Accepted: 13 February 2017 Published: 13 November 2017

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Abstract

The Microfinance system in Nigeria and many sub-Sahara countries has suffered serious setback due to poor loan repayment. This study attempt at assessing the loan-repayment performance of Lift Above Poverty Organization (LAPO). LAPO in Nigeria was chosen to be investigated because of its profile of attaining one million borrowers and disbursement of one billion dollars in micro-credits to smallholders. Secondary data on LAPO micro-credits from different sources from 1990 to 2014 were analyzed using Simple descriptive statistics such as percentages, mean, t-tests and regression techniques. The results of the analyses showed at 0.92 repayment rate and 0.08 default rate, LAPO enjoys high level of repayment and a low default rate. As further shown by the results, this is spurred by the borrower experience, positive effects of the volume of loans borrowed, number of borrowers, number of credit agency staff, and volume of loans repaid. Incentive-driven system and further administrative re-engineering towards enhancing repayment performance is recommended.

Published in	Mathematics Letters (Volume 3, Issue 6)
DOI	10.11648/j.ml.20170306.11
Page(s)	58-64
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

LAPO Microfinance, Micro Credit Repayment Performance, Repayment Rate, Default Rate, Nigeria

References

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[8]	Dunford, C. (1998). Microfinance: A means to what end? Monday Developments, 16; (17): 6 Retrieved on May 1, 2015 from http://www.alternative-finance.org.uk/cgibin/summary.
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[17]	Nannyonga, H. L. (2000). Determinants of repayment behavior in the Centenary Rural Development Bank inUganda. Doctoral Dissertation. The Ohio State University. United States. Retrieved from http://rave.ohiolink.edu/etdc/view?LAPO_num=osu1224271432.
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APA Style

Olatomide Waheed Olowa, Omowumi Ayodele Olowa. (2017). Tobit Analysis of Factors Influencing Loan Repayment Performance: A Case Study of Lift Above Poverty Organization (LAPO) Micro-Credit Agency in Nigeria. Mathematics Letters, 3(6), 58-64. https://doi.org/10.11648/j.ml.20170306.11

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ACS Style

Olatomide Waheed Olowa; Omowumi Ayodele Olowa. Tobit Analysis of Factors Influencing Loan Repayment Performance: A Case Study of Lift Above Poverty Organization (LAPO) Micro-Credit Agency in Nigeria. Math. Lett. 2017, 3(6), 58-64. doi: 10.11648/j.ml.20170306.11

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AMA Style

Olatomide Waheed Olowa, Omowumi Ayodele Olowa. Tobit Analysis of Factors Influencing Loan Repayment Performance: A Case Study of Lift Above Poverty Organization (LAPO) Micro-Credit Agency in Nigeria. Math Lett. 2017;3(6):58-64. doi: 10.11648/j.ml.20170306.11

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@article{10.11648/j.ml.20170306.11,
  author = {Olatomide Waheed Olowa and Omowumi Ayodele Olowa},
  title = {Tobit Analysis of Factors Influencing Loan Repayment Performance: A Case Study of Lift Above Poverty Organization (LAPO) Micro-Credit Agency in Nigeria},
  journal = {Mathematics Letters},
  volume = {3},
  number = {6},
  pages = {58-64},
  doi = {10.11648/j.ml.20170306.11},
  url = {https://doi.org/10.11648/j.ml.20170306.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ml.20170306.11},
  abstract = {The Microfinance system in Nigeria and many sub-Sahara countries has suffered serious setback due to poor loan repayment. This study attempt at assessing the loan-repayment performance of Lift Above Poverty Organization (LAPO). LAPO in Nigeria was chosen to be investigated because of its profile of attaining one million borrowers and disbursement of one billion dollars in micro-credits to smallholders. Secondary data on LAPO micro-credits from different sources from 1990 to 2014 were analyzed using Simple descriptive statistics such as percentages, mean, t-tests and regression techniques. The results of the analyses showed at 0.92 repayment rate and 0.08 default rate, LAPO enjoys high level of repayment and a low default rate. As further shown by the results, this is spurred by the borrower experience, positive effects of the volume of loans borrowed, number of borrowers, number of credit agency staff, and volume of loans repaid. Incentive-driven system and further administrative re-engineering towards enhancing repayment performance is recommended.},
 year = {2017}
}

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TY  - JOUR
T1  - Tobit Analysis of Factors Influencing Loan Repayment Performance: A Case Study of Lift Above Poverty Organization (LAPO) Micro-Credit Agency in Nigeria
AU  - Olatomide Waheed Olowa
AU  - Omowumi Ayodele Olowa
Y1  - 2017/11/13
PY  - 2017
N1  - https://doi.org/10.11648/j.ml.20170306.11
DO  - 10.11648/j.ml.20170306.11
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AB  - The Microfinance system in Nigeria and many sub-Sahara countries has suffered serious setback due to poor loan repayment. This study attempt at assessing the loan-repayment performance of Lift Above Poverty Organization (LAPO). LAPO in Nigeria was chosen to be investigated because of its profile of attaining one million borrowers and disbursement of one billion dollars in micro-credits to smallholders. Secondary data on LAPO micro-credits from different sources from 1990 to 2014 were analyzed using Simple descriptive statistics such as percentages, mean, t-tests and regression techniques. The results of the analyses showed at 0.92 repayment rate and 0.08 default rate, LAPO enjoys high level of repayment and a low default rate. As further shown by the results, this is spurred by the borrower experience, positive effects of the volume of loans borrowed, number of borrowers, number of credit agency staff, and volume of loans repaid. Incentive-driven system and further administrative re-engineering towards enhancing repayment performance is recommended.
VL  - 3
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Author Information

Olatomide Waheed Olowa

Department of Agricultural Education, Federal College of Education (Technical) Akoka, Lagos, Nigeria
Omowumi Ayodele Olowa

Department of Agricultural Education, Federal College of Education (Technical) Akoka, Lagos, Nigeria

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APA Style

Olatomide Waheed Olowa, Omowumi Ayodele Olowa. (2017). Tobit Analysis of Factors Influencing Loan Repayment Performance: A Case Study of Lift Above Poverty Organization (LAPO) Micro-Credit Agency in Nigeria. Mathematics Letters, 3(6), 58-64. https://doi.org/10.11648/j.ml.20170306.11

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ACS Style

Olatomide Waheed Olowa; Omowumi Ayodele Olowa. Tobit Analysis of Factors Influencing Loan Repayment Performance: A Case Study of Lift Above Poverty Organization (LAPO) Micro-Credit Agency in Nigeria. Math. Lett. 2017, 3(6), 58-64. doi: 10.11648/j.ml.20170306.11

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AMA Style

Olatomide Waheed Olowa, Omowumi Ayodele Olowa. Tobit Analysis of Factors Influencing Loan Repayment Performance: A Case Study of Lift Above Poverty Organization (LAPO) Micro-Credit Agency in Nigeria. Math Lett. 2017;3(6):58-64. doi: 10.11648/j.ml.20170306.11

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@article{10.11648/j.ml.20170306.11,
  author = {Olatomide Waheed Olowa and Omowumi Ayodele Olowa},
  title = {Tobit Analysis of Factors Influencing Loan Repayment Performance: A Case Study of Lift Above Poverty Organization (LAPO) Micro-Credit Agency in Nigeria},
  journal = {Mathematics Letters},
  volume = {3},
  number = {6},
  pages = {58-64},
  doi = {10.11648/j.ml.20170306.11},
  url = {https://doi.org/10.11648/j.ml.20170306.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ml.20170306.11},
  abstract = {The Microfinance system in Nigeria and many sub-Sahara countries has suffered serious setback due to poor loan repayment. This study attempt at assessing the loan-repayment performance of Lift Above Poverty Organization (LAPO). LAPO in Nigeria was chosen to be investigated because of its profile of attaining one million borrowers and disbursement of one billion dollars in micro-credits to smallholders. Secondary data on LAPO micro-credits from different sources from 1990 to 2014 were analyzed using Simple descriptive statistics such as percentages, mean, t-tests and regression techniques. The results of the analyses showed at 0.92 repayment rate and 0.08 default rate, LAPO enjoys high level of repayment and a low default rate. As further shown by the results, this is spurred by the borrower experience, positive effects of the volume of loans borrowed, number of borrowers, number of credit agency staff, and volume of loans repaid. Incentive-driven system and further administrative re-engineering towards enhancing repayment performance is recommended.},
 year = {2017}
}

Copy | Download

TY  - JOUR
T1  - Tobit Analysis of Factors Influencing Loan Repayment Performance: A Case Study of Lift Above Poverty Organization (LAPO) Micro-Credit Agency in Nigeria
AU  - Olatomide Waheed Olowa
AU  - Omowumi Ayodele Olowa
Y1  - 2017/11/13
PY  - 2017
N1  - https://doi.org/10.11648/j.ml.20170306.11
DO  - 10.11648/j.ml.20170306.11
T2  - Mathematics Letters
JF  - Mathematics Letters
JO  - Mathematics Letters
SP  - 58
EP  - 64
PB  - Science Publishing Group
SN  - 2575-5056
UR  - https://doi.org/10.11648/j.ml.20170306.11
AB  - The Microfinance system in Nigeria and many sub-Sahara countries has suffered serious setback due to poor loan repayment. This study attempt at assessing the loan-repayment performance of Lift Above Poverty Organization (LAPO). LAPO in Nigeria was chosen to be investigated because of its profile of attaining one million borrowers and disbursement of one billion dollars in micro-credits to smallholders. Secondary data on LAPO micro-credits from different sources from 1990 to 2014 were analyzed using Simple descriptive statistics such as percentages, mean, t-tests and regression techniques. The results of the analyses showed at 0.92 repayment rate and 0.08 default rate, LAPO enjoys high level of repayment and a low default rate. As further shown by the results, this is spurred by the borrower experience, positive effects of the volume of loans borrowed, number of borrowers, number of credit agency staff, and volume of loans repaid. Incentive-driven system and further administrative re-engineering towards enhancing repayment performance is recommended.
VL  - 3
IS  - 6
ER  -

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