The Impact of Debt-Servicing Burden on Household Expenditure in Nigeria: A Case of Ekiti State Senatorial Districts

Abstract

This study employs binary logistic regression technique to explore the impact of household debt-servicing burden on expenditure patterns in South-West geo-political region of Nigeria, using Ekiti State as a case study. Questionnaires were randomly distributed to 2500 households, and the results unveil that households with high income, large family-size and heads within the age group (40 and above) were more susceptible to debtburden. In addition, the paper highlighted that indebtedness compromises the quality of nutrition and health status of household members. Based on the above findings, we conclude that high indebtedness and debt burden trajectories cause deleterious effects on household consumption patterns and overall economic well-being. Thus, household heads should inculcate fiscal discipline which promotes saving culture and averts future shocks that could emanate from precautionary demands. Second, debt providers should regulate loans in cognizance to household repayment capacity and other stipulated policies which break the vicious cycle arising from over-indebtedness, install stability and spur economic development.