Determinants of loan repayment performance of fishermen: empirical evidence from Ghana

Abstract

This study investigated factors influencing loan repayment performance of fishermen. A survey of 67 randomly sampled fishermen was conducted using a standard questionnaire. An interview schedule was the main tool of data collection while descriptive statistics and multiple regression analysis were the main analytical techniques. The study showed that majority of the fishermen interviewed were in the productive age range, had high average annual income and were experienced fishermen. Empirical results indicated that 70.1% of the fishermen interviewed had delayed repayment and this was partly attributed to low catch and high debts from fishmongers. Regression estimation results reveals that loan repayment increased with years of education, fishing income, years of fishing experience and amount of loan whilst the age and investment made negatively influenced the amount of loan repaid. The regression analysis finds the fishing income, loan and amount of investment made as significant predictors of the amount of loan repaid. The covariates in the model explained 77% of the variation in the loan repaid. It is recommended that allocation of loans to fisheries sector be increased to stimulate fishing activities and improve repayment performance of fishermen.