EFFECTS OF CREDIT DEFAULT ON FINANCIAL INCLUSION AND PERFORMANCEOF COOPERATIVE THRIFT AND CREDIT SOCIETIES (CTCSs) IN YARA-IJUMU, OFKOGI STATE

Abstract

This study evaluated the effects of credit default on financial inclusion and performance of
cooperative thrift and credit societies (CTCSs) in ljumu, Kogi state, Nigeria. Specifically, it
examined how high credit utilization, debt-to-income ratio, and loan covenant validation
contributed to credit default and affects the financial performance of CTCSs in Yara- Ijumu.
Primary data was obtained through a well-structured questionnaire and one hundred and
seventeen (117) respondents were interviewed including CTCS management committee, loan
committees, trustees, and supervisory committees. Linear regression was used to analyzed the
data. The findings showed that high credit utilization, measured by multiple loan applications
relative to income, also weakened financial performance (coefficient = -.601, p = 0.000).
Similarly, a high debt-to-income ratio was linked to diminished dividends (coefficient = -
.541, p = 0.026). Conclusively, the findings demonstrated that late credit repayment
behaviour threatens the financial standard of CTCSs. The study therefore, recommended that
cooperative Credit and thrift cooperative societies should enforce strict credit eligibility
criteria and implement structured debt repayment plans. Cooperative Thrift and Credit
Societies should establish their members with self-home make products and members'
education should be taken seriously, so as to teach members on how to utilize credit,
generate revenue and manage debt. Finally, members should try to repay their credit
promptly to their cooperative thrift and credit societies.