Socio-Economic Characteristics of Informal Credit System in Cross River State

Abstract

This study investigates factors that influence Informal Credit Systems patronage among rural dwellers in Cross River State. Survey design was adopted for this study. Using the multi stage sampling technique comprising cluster, simple random, snow-ball, purposive and accidental sampling techniques, 567 respondents emerged as the study sample. The study adopted quantitative data. The questionnaire consisted of three sections with 15 triangulated items. Descriptive statistics based on research questions was calculated using frequency count and percentages. Independent t-test and analysis of variance (ANOVA) as well as least significant difference (LSD) test were employed to determine the influence of patrons’ socio-demographic variables on their utilization and usage of informal credit systems. Among other findings, the study revealed that: patrons’ gender was significant in influencing their usage of rotatory saving as a form of informal credit systems; the relationship between the influence of patrons’ marital status and informal credit systems’ usage among the various categories of informal credit systems showed a significant usage in rotatory and fixed savings; higher demands and family responsibilities were found to be motivating factors for informal credit systems’ patronage among married patrons; household size significantly influenced informal credit systems usage for rotatory and fixed savings; patrons’ level of education did not have any influence on their usage of rotatory and fixed savings as forms of informal credit systems. From the foregoing findings, evidence abound that the transactions of informal credit groups is necessary for group cohesion and rural development in Cross River State. This conclusion is realizable by tapping into the resources that dwell largely on ICSs members to spur participation and commitment to ICS utilization and patronage as well as identify people of integrity that can also contribute in the organization and management of informal credit groups