It has because very imperative to examine the role of
commercial Bank in financing of A agricultural projects PLC, (1999 – 2003), is
s topic so crucial that interested parties in the work many.
It is very
vital considering the role of commercial banks in general and first Bank in
particular play in financing of Agricultural. Project in Enugu state, in sustaining the Economy.
creditable role being played by the above bank in sustaining the economy of Enugu state and the
position of agriculture in the building of a venture find a self reliant nation
attracted the attention of the researcher. The instrument with which the
Central Bank of Nigeria Central the commercial Banks in general and first Bank
in particular in terms of Agricultural loans were examined. With credit
guidelines which comes out every year, Central Bank of Nigeria
specifies, the minimum percentage of loan of agricultural sectors. Secondarily,
the Federal Government of Nigeria and the Central Bank of Nigeria
established the Agricultural credit guarantee the value fund by which the
farmers who receive loan under it are guaranteed by the Central Bank of Nigeria. The
liability of CBN is the case of default is up to 75%.
tried to find out whether the decline in agricultural output within the state
has link with the absence of credit facility made available to formers by
commercial banks in general and first bank in particular in financing of
Agricultural projects in Enugu state, in doing so first Bank of Nigeria (FBN)
PLC with Bank office and area offices within Enugu state were selected for
studies, and because of size three local Government treas were also selected
for study and the include Enugu East and Enugu South.. Cluster sampling was
used to selected farmers on which questionnaire were administered.
in collecting data was interview method because there were some farmer who were
not very literate. The data collected was used testing the two hypothesis for
the topic. The hypotheses included that carry out feasibility study to
Agricultural farmers do not have any effect on commercial Banks in general and
Bank in particular in financing of agricultural project in Enugu state, and
commercial Banks aim general and first Bank in particular do not respond
adequately to farmers in financing needs
of agricultural project in Enugu state.
the above hypothesis, chi – square test was used. The test concluded that
carrying out feasibility study to Agricultural farmers in Enugu state do not have any effect.. It was
also concluded that commercial Bank in General and first Bank in particular do
not respond adequately to farmers in financing need of agricultural projects in
mirror issues in the researcher
questions in the project were weighted to percentages.
conclusion, commercial banks in general and first Bank in particular should be
more encourage to assist agricultural sector and appropriate staff expansion
recommended for effective supervision to avoid both loan default and diversion in Enugu state.
TABLE OF CONTENTS
Title page ii
Approval page iii
Table of contents xi
List of tables xv
List of figures xv
List of abbreviation xv
Background of study 1
Statement of the problem 4
Purpose / objective of the study 6
Research question 7
Research hypothesis 8
Significance of study
Scope, limitations and delimitations 11
Definitions of terms 12
Review of related literature 16
The meaning of agricultural finance 16
Financing agricultural projects in developed country 17
Agricultural finance in Nigeria as a developing country 21
Problems facing agricultural project finance in Nigeria
commercial bank (first bank of Nigeria plc) 24
Agricultural financing in Enugu state 31
Evaluation of commercial banks (first bank
f Nigeria plc) performance in
granting agricultural loans 31
Sources of agricultural finance in Enugu state 34
An overview of the federal government assistance
in relation to agricultural
Research design and methodology 42
Research design 42
Area of study 43
Sample and sampling techniques 44
Instruments of data collection 46
Methods of data presentation 48
Methods of data analysis 49
Data presentation and analysis 52
Presentation of questionnaire 54
Discussion of result 70
recommendations and conclusions 74
The findings of the study 74
LIST OF TABLES
Administration of questionnaire
Feasibility study table
Contingency table on loan application
Save custody respondent
Advisory services respondent
Conditions specified by banks
Respondent on granting of loan to agricultural projects
LIST OF FIGURES
Graph showing acceptance and rejection region
Graph showing level of significance
LIST OF ABBREVIATION
Acgsf - agricultural credit guarantee scheme
Camd - company and allied matter degree
C.B.N - central bank of Nigeria
Fao - food
and agricultural organization
Fbn - first
bank of Nigeria
Nig - Nigeria
Plc - public
X2 - chi – square
In the immediate past decade and
this present decade, there have been seminars, conferences, articles, Journals
and various publications by both local, national and International
Organizations on the sharp decline in Agricultural production on these various
programmes, some of these workshops, conferences and seminars include the
The 13th Annual workshop of the South – West
Research Extension Farmers impute Linkage system (REFILS) helped at the
Institute of Agricultural Research and Training (I.A.R.T), Moor plantation
Ibadan in March 2000 with topic “Adaptive Research and Method in
An Annual conference Organized by Agricultural
Extension society of Nigeria (AESON) held at university of Ibadan
Conference Society of Nigeria Centre, Ibadan on 10 – 12 April, 2000.
They emphases on the need to promote agricultural
production to reduce the unguided population explosion which is at geometrical progression (G.P) while
Agricultural production was only growing in an arithmetical progression. These
seminars, workshops, conferences also reminded the populace world wide of the
impending danger posed by the continuous deforestation practices of our forest
reserve, bush burning overyrazury, continuos coming and other environment
out little or on concerted effort are made in replacing the deforested areas.
They called on the need to embark on a national forestation scheme and forest
there bad been various campaigns for to inhabitants nationally to plant at
least one tree crop in his vicinity annually (tree planting compaign) All these
would have been uncalled for but for the indispensable role played by
agriculture in Nigeria economy, justly this project work, Agriculture sector in
developing and under – developed countries. It provides foods required for the
teeming population in both the rural land populace. It also provides raw
materials for our agricultural industries like Cotton to our textile
provides employment for about 60% of the labour force in developing countries.
Agriculture also provides incomes to individuals, states, and the nation, to
the peasant farmers and traders aluce. It provides money as income and means of
live holds to the farmer who sells this farm wares to the populace. To the
states, like Enugu state the cashew plantation at Ohhe not only provides raw
materials to industries but also provide income to the state government and to
the nation, it provides a means of export, thereby learning foreign exchange
and consequently reducing the chorus balance of payment deficit prevalent in
Agriculture contributed 31% the cross Dmester product (GDP) in sierra Leone,
1957, it contributed over 61% to GDP in Nigeria and in the year 2001, proceeds
from sales of grain (Agricultural product) in Nigeria amount to over N2.5N
Billion (CBN Bullion Jan / March 2001) The percentage contribution of
Agricultural sector to the national has seen declining since when the petroleum
sector started contributing heavily to the national income. Presently,
agriculture has assured a wider scope as against those days when agriculture
was viewed as a narrow feed which includes the propagation of seeds and crops
and the rearing of animals for man use. This does not fully inculcate all the
relevant aspect of agriculture. Some agriculture in of seeds and crop, include
souring and buying of farm input like seedlings machinery’s etc and the selling
of its output (agricultural marketing) and the use and provision of credit in
agricultural – financing). This later view is more prevalent now especially
among the literate populace. The use and provision of agricultural credit will
equally assist us in appreciating the role of commercial banks in financing
agricultural project in Emugu state their problems and prospects. This forms
the course of this project.
The major concern of this study
us to know from the lender (First Banks as the Commercial Bank) and the recount
(Farmers and Agriculturists) loan effectively agricultural project are Financed
in Enugu State a result of the donnreeening and
indispensable role of commercial banks. Since
the establishment of the bank in 1894, they has been carry out financial
assistance to agriculturist.
encounter various difficulties when trying to get financial aids from
commercial banks - some of these
difficulties are as follows:
Agriculturist / Farmers do not get financing aids such
as Bank Loans / credit when they need it.
Commercial banks granting loan to farmers due to
adequate collateral for such loan .
Illiteracy among the farmers also crenate a very
difficulties because of this farmer do not o to banks to receiving advisory
services which might help then to increase their productivity.
OBJECTIVE OF THE STUDY
To find out whether carrying out feasibility studies
for agricultural project is one the roles commercial banks plays in the
financing of Agricultural projects in Enugu
To investigate whether provision of credit facilities
to farmers is one of the first banks play in financing of agricultural projects
in Enugu state.
To find out whether opportunity of safe custody of fund
is one of the roles which First Banks play in financing of Agricultural
projects in Enugu
To find out whether provision of financial lease to
farmers in Enugu state is one of the roles First Banks play in financing of
agriculturist project in Enugu state.
To find out whether rendering advisory services to
farmer is a role which First Banks plays in financing Agricultural project in Enugu state from 1999
1. Is carrying
out feasibility studies for Agricultural project one of the roles of commercial
banks play in financing agricultural projects in Enugu state ?
2. Is provision
of credit faculties to farmers one of the roles of the First Bank play in
financing of Agricultural project in Enugu
Is commercial banks in general and first bank in
particular save funds realize by farmers in Enugu state.
Is provision of financial lease to farmers in Enugu state one of the
roles First bank play in financing of agricultural project in Enugu state.
Is rendering of industry services to farmers in Enugu state one of the
which First bank in particular and commercial bank in general play in financing
of agricultural projects in Enugu
state 1999 –2003.
H0: Absence of
feasibility study do not affects the farmers chance of securing loan in Enugu state.
Hi: Absence of
feasibility study affects the farmers chance of securing loan in Enugu state.
H0: First bank in
particular commercial bank in general do not respond adequately to the
financial needs of agricultural projects in Enugu states.
Hi: First bank in particular and commercial banks general
do respond adequately to the financial needs of agricultural projects in Enugu
The study will benefit a lot of
lot of people due to the astronomical population growth presently with out a
correspondent growth in agricultural productivity to feed for the growth in
population, especially in the developing countries the people who benefit more
from this study are the national, state government especially Enugu state the
commercial banks with emphases on First bank, the farmers the renders and
prospective future researcher on this topic.
THE GOVERNMENT :The
federal government stands to gain from this study by understanding the impact
of the various monetary places on the
effective running of commercial banks in relation to loan granted to the
farmers. The state government especially Enugu state, in th same vein, stands
the extent and effect on commercial bank lending policies in relation to
farmers in the state and the various ways they can help in amehoreting the
plight of farmers in elation to securing loans and consequent increase in
productivity in the state.
BANK: This commercial bank with great emphases on First bank, it will
enable them to know the most suitable
loan to be issue to different categories of farmers to reduce the changes of
bad debt arising from non – repayment of loans granted to farmers, the type of
incentive necessary to reduce non –
repayment record, recorded on farmers part and on the need to recruit more
agricultural credit officers do as to bridge the gap create by farmers
knowledge of banking activities.
FARMERS: On the part of farmers, it will enlighten the agricultural sector,
the collateral expected of them and the repayment period to the prospective
researcher, it will serves as a fertile
ground to update and expand this study.
READERS: To the reader, it will help them
appreciate and evaluate the efforts the Federal and their arms of government in
boasting agricultural productivity. It will also enable them to assess how
effective and efficient the loan responding to agricultural financing.
the findings may help in redirect and reorienting our farmers on the right
direction as to loan available and requirement.
LIMITATION AND DELIMITATION OF STUDY
The scope of this study were
limited by the various factors, same of which are classified as secret nature
of banking industry, inadequate finance , time constraint the magnitude of
illiterate farmers, the dispersed nature
of their settlement and the unwillingness on the part of respondents in
sacrificing their time.
limitation of this study classified nature of banking industry; since banking
activities are mostly not assessable to members of public, most of the required
data for this project could not be reached. The shortage of finances experience
by the researcher especially in the present economic recession prevented the
research from reaching out to as many
respondents and First Bank as possibly.
constraint also militated against this project due to the 2003 /2004 academic year calendar, the
short period therein was inadequate time for the academic work which equally
affected this project due to this time constraint some text books and journals
which would have added space to this project were non – used.
Under the deli9mation of the study, the study is on the role of commercial banks
in financing of agricultural project in Enugu
state. The study is such that it concern the farmers as the agriculturist and
the bank as financial institutions.
researcher would have loved studying all other banks and states in the same
category but due to some constraining factors, he has limited on First Bank of
1. FINANCE: This
is the efficient sorcery, application and management of fund to maximize
wealth. Finance can also be explained as the possession of funds when it is
needed for investment. This explanation indicates that finance does not just
mean the usage of fund but as well included the souring required funds at the
right time and sharing of return (Iloh;
2. AFGRICULTURE : This is the scientific propagation of plant and rearing of
amounts which is meant for scouring and application of fund ( Credit Facilities
to make it available for use) and the
marketing of its out put (Agricultural
marketing) for man uses .
3. COMMERCIAL BANKS: These are those banks concerned with lending of money to
businessmen, firms co-operation etc. for a short periods on the strength of
liquid securities, they also play the role of safe custody of find and the
4. PROJECT : This
is plan when making a research work, or tools that are necessary for work making which involves
the investment of scare human and material resource which can be quantitative
and qualitatively analyzed with a primary objectives of assessing the economic
returns which accrue to that venture inflows.
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Comprehensive Agricultural Science for West Africa Senior Secondary
Schools Onitsha; De – diamond Publishers Revised Edition PP 39 - 48
Oriji John (1996);
Banking Operations in Nigeria,
Publishers PP 2
Ukemenam C. O.
(2001); Practice of Banking for students
and professionals, Enugu Otek Publishers PP . 6
Udeh S.O (2000);
Business Finance, Enugu
Malik Enterprises Nigeria
PP. 186 – 188
Odike J. C.
(2001) , Managerial Economics Enugu, JTC Publishers PP
303 – 306
First Bank (2002); Business and Economic Report PP 10
Orjih John (2000), Portfolio Management, Enugu Splashmedia Organization PP. 15
CBN Bullion (2001)
Vol 25 N0 1 Jan / March
Iloh J.V.C (1999), Business Finance (Issues and
Glance venture PP . 2 .