An appraisal of credit management practices in rural agricultural finance: a case study of Access Bank Nigeria
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Background of the Study
Effective credit management is essential for maintaining the sustainability of agricultural finance in rural areas. Access Bank Nigeria has implemented several innovative credit management practices aimed at reducing non-performing loans and optimizing loan performance. These practices include rigorous borrower screening, flexible repayment structures, and proactive monitoring systems that are tailored to the cyclical nature of agriculture. By employing digital tools and data analytics, the bank can continuously assess the creditworthiness of rural borrowers and adjust loan terms in real time, ensuring that credit is extended under conditions that minimize default risk (Oluseyi, 2023).
The bank’s approach integrates traditional credit assessment methods with modern digital solutions, allowing for a more nuanced understanding of borrower behavior. Regular field visits and financial literacy programs further enhance borrowers’ capacity to manage their loans effectively. This dual approach not only improves loan recovery rates but also builds long-term trust between the bank and its rural clientele. Moreover, Access Bank Nigeria leverages feedback from borrowers to refine its credit management practices, ensuring that the products remain relevant and responsive to the needs of the agricultural sector (Akinola, 2024).
Despite these measures, challenges persist in credit management, including difficulties in accurately forecasting income fluctuations, delays in loan restructuring, and insufficient borrower education on debt management. These challenges can lead to increased default rates and reduced overall credit performance. This study appraises the current credit management practices at Access Bank Nigeria and seeks to identify areas for improvement that can enhance financial stability and promote sustainable lending in rural agriculture (Ibrahim, 2025).
Statement of the Problem
Although Access Bank Nigeria has adopted several best practices in credit management, the bank continues to face significant challenges in managing agricultural loans effectively. Many rural borrowers struggle to meet repayment deadlines due to unpredictable income patterns and external shocks, resulting in high default rates (Oluseyi, 2023). The existing risk assessment models, while advanced, are sometimes unable to capture the full spectrum of variability inherent in agricultural income. Furthermore, delays in identifying repayment issues and initiating loan restructuring exacerbate the problem, leading to a buildup of non-performing loans (Akinola, 2024).
Additionally, limited financial literacy among borrowers often results in mismanagement of credit and poor budgeting practices, which further contribute to loan defaults. The integration of digital monitoring systems with on-the-ground assessments is also inconsistent, resulting in gaps in data and delayed interventions. These issues undermine the bank’s ability to maintain a healthy loan portfolio and restrict its capacity to extend further credit. This study aims to identify the root causes of poor credit management in rural agricultural finance at Access Bank Nigeria and to propose targeted improvements that can reduce default rates and enhance overall credit performance (Ibrahim, 2025).
Objectives of the Study
• To evaluate the effectiveness of current credit management practices.
• To identify challenges that hinder timely loan restructuring and risk assessment.
• To recommend strategies for improving borrower education and monitoring systems.
Research Questions
• How effective are current credit management practices in reducing loan defaults?
• What challenges impede timely risk assessment and loan restructuring?
• What measures can improve borrower financial literacy and monitoring?
Research Hypotheses
• H1: Advanced credit management practices significantly reduce non-performing loans.
• H2: Inadequate borrower education negatively impacts credit performance.
• H3: Enhanced integration of digital monitoring improves loan recovery.
Scope and Limitations of the Study
This study focuses on Access Bank Nigeria’s rural agricultural loan portfolio. Data are collected from bank records, borrower surveys, and monitoring reports. Limitations include regional disparities and potential inaccuracies in self-reported data.
Definitions of Terms
• Credit Management Practices: Strategies and methods for assessing, monitoring, and collecting loans.
• Agricultural Finance: Loans and financial services provided to support agricultural production.
• Non-performing Loans: Loans in which borrowers fail to make scheduled repayments.
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