An assessment of the influence of market information on agricultural loan performance: a case study of Guaranty Trust Bank
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Background of the Study
Market information plays a pivotal role in shaping the decisions of both lenders and borrowers in the agricultural sector. Guaranty Trust Bank (GTBank) has incorporated market intelligence into its credit assessment and loan monitoring processes to better align loan products with prevailing market conditions. By collecting real-time data on commodity prices, weather forecasts, and regional economic indicators, the bank is able to adjust credit terms and mitigate risks associated with agricultural lending (Adekunle, 2023).
This integration of market information not only supports more accurate risk evaluation but also helps borrowers make informed decisions about crop planning, input purchases, and investment timing. GTBank’s approach includes the use of digital platforms that disseminate market updates to farmers, as well as analytics tools that help predict market trends and assess potential repayment risks. These strategies have proven to enhance loan performance by ensuring that credit is extended on terms that reflect current market realities, thereby reducing the incidence of defaults.
However, the effective use of market information is contingent on the availability and reliability of data, as well as the capacity of rural farmers to interpret and act on this information. In many cases, challenges such as data latency, regional disparities in market conditions, and low digital literacy among borrowers hinder the full benefits of market-informed lending. Despite these obstacles, the incorporation of market intelligence is viewed as a key innovation for improving agricultural loan performance and promoting financial inclusion. This study aims to assess how market information influences loan performance at GTBank and to identify strategies for optimizing its use to improve credit outcomes (Olatunji, 2024; Ibrahim, 2025).
Statement of the Problem
Although GTBank has integrated market information into its credit assessment framework, several challenges undermine its potential to improve agricultural loan performance. Inconsistent data quality, particularly in remote rural areas, limits the bank’s ability to accurately gauge market conditions, leading to mismatches in loan terms and borrower capacity (Adekunle, 2023). Additionally, many rural borrowers have limited experience in interpreting market data, which can result in suboptimal financial decisions and increased default risks. These issues are compounded by the dynamic nature of agricultural markets, where rapid changes in commodity prices and weather conditions can quickly alter risk profiles. The lack of effective communication channels for disseminating market information further diminishes its impact, as borrowers may not receive timely updates necessary for adjusting their financial plans (Olatunji, 2024). Consequently, the potential benefits of using market intelligence to enhance loan performance are not fully realized, leading to persistent challenges in credit management. This study aims to identify these critical gaps and propose measures to enhance the effective use of market information in agricultural lending (Ibrahim, 2025).
Objectives of the Study
• To assess the influence of market information on agricultural loan performance.
• To identify barriers that hinder the effective use of market data in credit evaluation.
• To recommend strategies for improving the integration and dissemination of market information.
Research Questions
• How does market information impact the credit performance of agricultural loans?
• What are the main challenges in collecting and disseminating market data?
• What measures can enhance the effective use of market intelligence in loan assessments?
Research Hypotheses
• H1: The integration of market information significantly improves loan performance.
• H2: Inadequate data quality and dissemination negatively affect credit outcomes.
• H3: Enhanced training on market information usage improves borrower decision-making.
Scope and Limitations of the Study
This study focuses on GTBank’s use of market information in selected rural agricultural regions. Data are obtained from bank records, market analytics reports, and borrower surveys. Limitations include regional variations in data availability and potential inaccuracies in market forecasting.
Definitions of Terms
• Market Information: Data on commodity prices, weather forecasts, and economic indicators relevant to agriculture.
• Loan Performance: Measures of credit uptake, repayment, and default rates in agricultural finance.
• Financial Inclusion: Efforts to ensure that underserved populations have access to financial services.
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