THE ROLE OF FINANCIAL INSTITUTIONS IN AGRICULTURAL DEVELOPMENT IN NIGERIA
TABLE OF CONTENT
CHAPTER ONE
1.0 Introduction
1.1 Background Information
1.2 Statement of the problem
1.3 Purpose of the study
1.4 Importance of the study
1.5 Limitation of the study
1.6 Statement of the hypothesis
1.7 Definition of terms
CHAPTER TWO
2.0 Literature Review
2.1 Origin of agriculture I Nigeria.
2.2 Sequence of Agricultural Development in Nigeria.
2.3 Present position of Agriculture in Nigeria.
2.4 Financial Intermediation functions
2.5 Problems in agricultural financing.
2.6 History of Nigerian Agricultural and Co-operative Bank Ltd. (NACB).
2.7 Establishment and achievements of NACB.
2.8 Aims and objectives of NACB.
2.9 NACB functional and operational scheme.
2.10 Sources of funds and financial capability
2.11 Terms and conditions for borrowing.
CHAPTER THREE
3.0 Research Design and Methodology
3.1 Population and sample
3.2 Design of the Questionnaire.
CHAPTER FOUR
4.0 Data Analysis and Interpretation
4.1 Data collection
4.2 Analysis and interpretation of hypothesis
4.3 Analysis of operations and impacts of NACB
4.4 Findings relating to the research work
CHAPTER FIVE
5.0 Summary of Findings, Conclusion and Recommendations
5.1 Summary of findings
5.2 Conclusion
5.3 Recommendations.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF INFORMATION
Agriculture is still most important sector of the country’s economy. It’s role in economic development can be traced back to, at-least to the mid-eighteenth century, and which was central to the early development of the analytical economics by Adam Smith, David Richardo, and Thomas Malthius, typically some 40 to 60 percent of the national income is produced in agriculture and from 50 to 80 percent of the labour force is engaged in agricultural production.
However, agriculture has four major roles to play in economic development. These are, to increase the supply of food for domestic consumption, to release labour for industrial output, to increase the supply of domestic savings and to earn foreign exchange. The final role, that is the earn foreign exchange implies that the country is open to international trade.
Not withstanding the roles of agriculture in the country’s economy, agriculture is encountering a lot of problems, which lead to decline and poor performance in agricultural sector. These problems include lack of fund: inadequacies in the supply and use of farm inputs, unfavourable macro-economic policy; land constraints; poor post-harvest technology; environmental hazards; disease and pest infestation; labour constraints; low rate of adoption of appropriate technology; transportation; low income earning etc. infact agriculture in Nigeria is caught in a low level of equilibrium trap.
In the past, attention given to agriculture by government was not encouraging. Farming was pushed to the background and farmers were not introduced to the modern method of farming which would have gone a long way in helping to boost agriculture. Until 1976, during the first Obasanjo regime, alteration was beginning to be given to agriculture with launching of operation feed the Nation (OFN). The idea behind OFN was that all Nigerians should join hands together to produce food for ourselves and the nation. Ever since them, successive governments have followed with different programmes all aiming at developing agriculture and agricultural projects.
Moreso, government has shown great concern in this wise idea with the establishment of Nigerian Agricultural and co-operative Bank Ltd. (NACB). This bank, which is an apex up to grant agricultural credit to the agricultural and agro-allied sector of the Nigerian economy. This is carried out through the provision of loans to individuals, co-operatives organizations, limited liability companies, state and federal government agencies.
1.2 STATEMENT OF PROBLEM
In many developing countries of the world, financial facilities are few and far between. In reviewing the evolution of financial markets in Asia, Latin America and African countries, it was asserted that the new financial facilities are clearly needed to external financial carriage especially in Nigeria. In supporting this assertion. It was shown that at ascertain stage in agricultural development, agricultural credit clearly does become a strong force for further improvement.
Therefore, of the two capital markets (the institutional and non-institutional) available to rural producers, the informal sources is the most extensive suppliers of credit in Nigeria, yet this source has not supplied the amount of credit in terms required by farmers to modernize their farming methods.
Based on the above, these questions arise from the following problems.
1. Why has agricultural been relegated to the background in Nigeria?
2. Why has the government not been able to salvage agriculture and place it in its rightful position in the economy inspite of its laudable agricultural programmes.
3. Should the low level of institutional credit be attributed to insufficient funds in effective supervision by monetary authorities political interference etc.
The above problems are set-to help to investigate and analyze the role of financial institutions in agricultural development in Nigeria.
1.3 PURPOSE OF THE STUDY
This could be seen in three ways,
i. To identify the problems of agriculture and its finance in Nigeria.
ii. To assess the role of financial institutions in assisting government to solve the problems that may be identified.
iii. To propose solution for some of the general problems of agriculture and measure to infansity the role of financial institutions in accelerating and balancing the development o Nigerian agriculture, through a modern and more enlightened agricultural policies / programmes.
1.4 IMPORTANCE OF THE STUDY
It is obvious that agricultural production especially food is an economic and political issue in Nigeria today. The current problems associated with high cost of food cannot be separated from the general health of the economy because of its adverse effects. These problems are of interest not to the government alone, who will prefer a moderate increase in food prices but they are also of great concern to the consumers whose earnings are been roded by the high prices of food.
However, these pieces of work would inform the farmers and others who would like to get into farming.
i. The types of agricultural credit finance that are available in NACB.
ii. The conditions for borrowing
iii. Detail requirement
iv. How to apply loan
v. The problems in agricultural lending in Nigeria.
On the whole, the research offers an interesting and a good recommendation that will help government and their agents to face identified agricultural financing problems in Nigeria.
1.5 LIMITATION OF STUDY
This study was indented to bring to light the role of financial institutions in the agricultural development in Nigeria. This research was supposed to have covered the states of the federation but because of the wide geographical spread of my research subjects and the limited finance to travel personally to these states. In addition to the poor postal system in the country to receive feedback through questionnaire and within the time limit required writing and submitting this work. Therefore I limited my research to the information I was able to gather from Enugu. On the basis of the data received and assuming the same condition all over the federation. I have drawn my conclusion.
1.6 STATEMENT OF HYPOTHESIS
The hypothesis below are sent to be tested and analyzed.
i. That loan should be granted to farmers to assist in agricultural development.
ii. High interest rate would reduce agricultural development.
iii. Banks consider loan to all categories of farmers.
iv. Adequate and proper training of staff would lead to improve relationship with customers.
