PAPER TITLE :FACTORS INFLUENCING DEFAULT AMONG PARTICIPANTS IN ROTATING SAVINGS AND CREDIT ASSOCIATIONS (ROSCAS) IN YEWA DIVISION OF OGUN STATE, NIGERIA

JOURNAL Of SUSTAINABLE TECHNOLOGY | VOLUME 10 NUMBER 1 2019

Paper Details

  • Author(s) : Akerele, E.O. and Obasanya, S.
  • Abstract:

Against the background of susceptibility of Rotating Savings and Credit Associations (ROSCAs)
in the Yewa Division of Ogun State, Nigeria to default which poses high risk to their sustainability, this study
assessed the factors influencing default in the association with a view to providing empirical link between
participants’ socio-economic characteristics and default in the association for decision-making. Towards
achieving this research objective, data were collected from 400 randomly selected residents within the division
through a structured questionnaire. Descriptive and inferential statistics including frequency counts, percentages
and measures of Central Tendencies, Probit Regression Model, Analysis of Variance (ANOVA) as well as Chisquare
model were used in analyzing the study data. Results revealed significant difference (p<0.05) in the
average age of defaulters (37.12 years) and non-defaulters (37.91 years). Household sizes of defaulters (4.66)
and non-defaulters (4.11) were found to be significantly different (p<0.05) as well as their educational levels,
marital statuses and main occupations. The income level of defaulters (N245,527) and non-defaulters (N200,426)
was also found to differ significantly (p<0.05). However, no significant difference (p<0.05) was found in the
gender, membership of social groups, tribes and religions of defaulting and non-defaulter ROSCA participants.
Household size, annual income, what the pot was used for, proportion of working household members to
household size had significant association with default in the association. Spending the lump sum received
solely on personal consumption rather than business, having to repay too many slots at a time and having too
many dependants to cater for at the home front were the major challenges militating against repayment of
ROSCA pots in the study area. The study concluded that default in the associations was high and influenced
by some of the participants’ socio-economic circumstances. The paper therefore recommended that ROSCAs’
foremen should be wary of respondents taken too many slots per ROSCA round to avoid default tendency.
Keywords: ROSCA, Default, Socio-economics, Determinants, Yewa Division, Ogun State