Investigation of the Factors Affecting Loan Repayment Performance in Cooperative Societies in Kwara State

Loan repayment performance is a critical determinant of cooperative financial sustainability, as high default rates erode the lending capacity that makes cooperatives valuable to their members. This study investigated the factors affecting loan repayment performance in cooperative societies in Kwara State, North Central Nigeria. A cross-sectional survey was conducted among 210 borrowers from seventeen cooperatives in Ilorin West, Offa, and Moro LGAs. A structured questionnaire captured data on loan sizes, terms, income stability, diversion of loan funds, and repayment outcomes. Binary logistic regression was employed to identify significant predictors of timely repayment. Results showed that 58.1 percent of borrowers were classified as good payers based on repayment records. Significant predictors of repayment default included loan diversion to non-intended uses (OR 4.1; p < 0.001), income shock from illness or business failure (OR 3.6; p < 0.001), and receipt of multiple concurrent loans (OR 2.8; p < 0.01). The size of the loan relative to income was not a significant predictor once income stability was controlled for. Cooperative members with longer membership duration showed significantly better repayment performance. The study concludes that loan diversion and income instability are the primary drivers of default in Kwara cooperative societies and recommends project-tied loan disbursement, income-smoothing credit products, and member credit education as priority interventions. Keywords: loan repayment, cooperative societies, Kwara State, credit management, North Central Nigeria