Purpose: Using a cross sectional dataset from cassava farmers in Cross River State, Nigeria, the purpose of this paper is to investigate smallholder cassava farmers’ capacity to repay loans. This is premised on the rising loan default rate among farmers, which has affected loan volume to agricultural sector. Approach: Regression analysis is use in estimating repayment capacity of the farmers and cash flow coverage gives greater insight to what percentage is committed to debt payment. Findings: Results reveal that with an average farm size of 1.2ha, smallholder cassava farmers used 60.60% of the returns in debt repayment. The regression result further shows that the size of the farm and gross returns are very key in boosting a farmer’s capacity Research implications/limitations: Many financial Institutions in Nigeria do not give flex loans to agricultural enterprises which directly or indirectly affects farmers’ capacity to repay loans because of the peculiarity of the sector. If more than sixty percent of gross returns is committed to debt, many farmers will certainly almost default. Therefore, rescheduling loan terms in line with production activities will strengthened farmers’net worth. However, this research is situated in Nigeria where these group of farmers may be markedly different from those outside the borders of the country and may not, therefore, apply outside the shores of the country. The use of cross sectional data, too, is limited with attendant decision problems, other datasets such as pooled may be applied subsequently. Originality/value: This paper investigates repayment capacity in the light of cash flow coverage. To the best of our knowledge, this is the first paper that has done this since previous studies have only researched on repayment capacity determinants.