The Role of Informal Credit Groups (ICGs) on the Economy of Rural Areas in Cross River State, Nigeria

This study explores the role of Informal Credit Groups (ICGs) on the economy of rural areas in Cross River State. The study employ the survey design to collect both quantitative and qualitative data from 567 respondents from 63 informal credit groups across various rural communities in Cross River State. Using frequency counts, mean ranking, percentages, standard deviation and ANOVA (Analysis of Variance) with Least Significant Difference (LSD) multiple comparison test to analyse data collected using questionnaire and interview schedule, among other findings, the study revealed that Informal Credit Groups attached high sense of responsibility and preference to married patrons as basis for collateral and its management. Respondents were more prominent in the usage of rotatory savings followed by fixed savings as forms of informal credit system; the relationship between the influence of patrons’ marital status and Informal Credit Groups’ usage among the various categories of Informal Credit Groups showed a significant usage in rotatory and fixed savings; higher demands and family responsibilities were found to be motivating factors for Informal Credit Groups’ patronage among married patrons; Result based on patrons response indicates that factors such as: fear (3.20), extortion (3.16%) and exploitation from executives (3.14), poor management (3.04), could constitute challenges to the effective patronage and utilization of ICGs in Cross River State. Recommendations that can improve the operations of Informal Credit Groups, alleviate poverty and foster rural development were made.