Occupation, Culture and Religion as Mediating Effect of Borrowers` Poverty Alleviation Loan Repayment

It is widely believed that religion and culture offer distinctiveness to credit loan for poverty alleviation programmes, and loan repayment. The major religions of the world urge members to assist the poor, devoting time, material and spiritual resources to this cause. It is widely believed that religion and culture offer distinctiveness to credit loan for poverty alleviation programmes, and loan repayment, but this has not sufficiently proved true. The purpose of the study is to resolve the problem of the small entrepreneurs in accessing loans for poverty alleviation through further investigating the moderating effect or otherwise of culture, religion and occupation on poverty alleviation loan repayment. The exploratory cross sectional research design was adopted. The population is the entire microfinance banks in Ogun State, Nigeria which are 53 (CBN, 2012), including micro-loan beneficiaries. The value of loan granted to the beneficiaries of selected microfinance banks is N185,115,000 while the total numbers of beneficiaries is 4,016 between the year 2008 and 2012. Logistic regressions model was adopted to ascertain if borrower’s culture, religion and occupation have mediating effect on Loan Repayment-Poverty Alleviation relationship. The simultaneous effect of the three predictor variable (borrower’s culture, religion and occupation) was analyzed using logistic regression model and the results were presented. The analysis was performed with a total of 1745 cases. The full model significantly predicted the poverty alleviation and loan repayments among beneficiaries (omnibus chi square = 16.997, df = 3, p < 0.05). i.e., there is statistically, simultaneous effect of borrower’s culture, religion and occupation on loan repayment and poverty alleviation. The full model accounted for between 1 and 2.5% of the variance in poverty alleviation and loan repayments. However, the logistic regression model for each predictor variables revealed that only borrower’s culture is significant. The model predicts a negative effect of borrower’s culture on loan repayment-poverty alleviation relationship. The negative value indicates that the probability of alleviating poverty and loan repayments among beneficiaries declined with increase in borrower’s culture by a factor of 0.442 and 0.170. The magnitude of the decrease for poverty alleviation is in the range of 23.3 to 83.9% and 9.2 and 31.6% for loan repayment Keywords: Borrowers’ poverty alleviation, Occupation, culture, Religion, mediating effect