PROPOSAL
This research
work is carried out on the contribution of Commercial Bank towards development
of Agricultural sector in Nigeria.
The work is the divided in to five chapters each. Dealing
with a unique aspect of the study leading to the other looked at the managerial
manner.
Chapter one
deals with the statement of the problem, objective of the study, significant of
the study, scope and limitation of the study, Research methodology, plan of the
study, Definition of terms and the roles of commercial bank in agricultural
development.
Chapter two of
the research work critically deals with an overview of the Agricultural sector
in Nigeria, Effort Nigeria Agricultural found cooperative bank towards
Agricultural financing, problems of finding Agriculture by commercial banks and
problems arising from government policies.
Chapter four
shows the data presentation and analysis, Data presentation and analysis, Data
presentation and analysis of personal data staff, analysis of responses
received from bank staff, analysis of the responses to question directed to the
customer farms and hypothesis tasting.
While chapter
five deals with finding, summary, conclusion and recommendation.
TABLE OF CONTENTS
TITLE PAGE i
CERTIFICATION ii
DEDICATION iii
ACKNOWLEDGEMENT iv
PROPOSAL vi
TABLE OF CONTENTS vii
CHAPTER ONE
1.0
Introduction 1
1.1 Statement
of the Problem 6
1.2 Objective
of the study 7
1.3 Significant
of the Study 7
1.4 Scope
and Limitation of the Study 8
1.5 Research
Methodology 9
1.6 Plan
of the Study 9
1.7 Definition
of Terms 10
1.8 The Roles of Commercial Bank in
Agricultural Development 11
CHAPTER TWO
2.0 Introduction 15
2.1 An Overview Of The Agricultural Sector In
Nigeria 18
2.2 Effort Nigeria Agricultural Found
Cooperative Bank
Towards Agricultural Financing 19
2.3 Problem Of Finding Agriculture By
Commercial Banks 20
2.4 Problems Arising From Government Policies 25
CHAPTER THREE
3.1
Historical Background Of Union Bank Plc 29
3.2
Organization Structure Of Union Bank 31
3.3
Research Methodology 31
3.4
Population Sample 31
3.5
Methods Of Data Collection 32
3.6
Methods of Data Analysis 33
3.7
Limitations To Methodology 34
CHAPTER FOUR
4.0
Introduction 36
4.1 Data
Presentation and Analysis 36
4.2 Data Presentation and Analysis of Personal
Data
of the Bank Staff 37
4.3 Analysis of Responses Received From Bank
Staff 39
4.4 Analysis of the Responses to Question
Directed to the
Customers Farms 42
4.5 Hypothesis Testing 48
CHAPTER FIVE
5.1
Finding 52
5.2
Summary 53
5.3
Conclusion 54
5.4
Recommendation 55
REFERENCES 56
CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND
OF THE STUDY
In
most development countries, like Nigeria agricultural sector is both the main
traditional pursuit and key to sustained growth of the modern economy. Economic
growth has gone hand in hand with agricultural production stagnation; in
agriculture is the principal explanation of poor economic performance. While arising
agricultural productivity has been the most important basis for successful
industrialization. Among the roles conventionally ascribed to the agricultural
sector in a growing economy are those of;
Providing adequate food for an
increasing population supplying raw materials to a growing industrial sector,
constituting then major sources of employment, earning foreign exchange through
commodity export and providing for the product f the industrial sector.
Agricultural is thus seen as the
backbone of the economy. Nigeria is a predominantly an agricultural economy and
as long as she remains so the future of the sector in performing its role
become important in the early 1950s agricultural play a crucial in our economic
development as a nation.
It provided employment to millions of
Nigeria and over seventy five percent {70%} of the labour force mostly from
rural areas. In golden agriculture years, contribution from this sector
accounted for about seventy percent [70%} of the Goss Domestic Product (GDP). Its
percentage contribution however has fallen drastically in recent years due in
part to boom in petroleum industry and the growth of industrial sector.
Having
said all these, it is however unfortunate to say that the agricultural sector,
despite its indispensability to the economic survival of the country is
seriously affected by several predicaments which may under its contribution to
the economy. One of the most predominant of them is that of the financial
problem faced by the farmers. Much of the family holdings in Nigeria operate
agriculture at small scale level.
The
inadequate domestic food production was reflected in Nigeria’s massive food
imports, especially in the 1970s to argument domestic supply.
To
solve the financial problem faced by the framers commercial banks have crucial
to play towards agricultural development in the nations economy. The commercial
banks have to come to the aid of the extending credits to the farmers at
reasonable rate of interested. They are also to provide them with essential
consultancy programmes for better agriculture. Henceforth, theories of
commercial banks remains paramount towards the development of agriculture in
Nigeria, like every other developing countries of the world.
AGRICULTURAL
DEVELOPMENT
In order to tackle some
of the problem controlling the agricultural sector, the government put in place
certain policies and programmes with a review of solving them. The genesis of
those policies and programmes could be traced back to 1950s and 1960s when
various credit institutions and programmes were established to support and
finance agricultural development. Most important of these programmes include, Operational
Feed the Nation [OFN] this was started in 1970 by then military regime as a
mass enlightenment and mobilization campaign to raise agricultural output mainly through expansion of areas
under cultivation. National Accelerated Food Production Programmes
[NAFPP].Which was started in 1973 on a pilot phase but was extended to all
state on the federation 1977 as a means to systematically build up national
capacity for increase in food production through the development of a good
package of technology other agricultural input and their integration with
appropriate credit extension and marketing system.
Green Revolution Programme {GRP}: This
was launched in 1980 by the defined National Party of Nigeria regime in the
second Republic and was aimed at raising agricultural productivity through
massive use of input such as fertilizer and improved seeds. Also the government
has undertaken special project like the agricultural development project {ADP},
the Accelerated Development Area Programme {ADAPS}. The river basin and Rural
Development Area Programme [ADAPS} as well as other measure both at federal and
state levels to enhance agricultural production because of their realization of
the numerous contribution of a highly developed agricultural sector could make
the development of a highly developed agricultural sector could make the
development of Nigerian economy. First and increase in export crop production
should supplement out foreign exchange earnings. A successful attempt to bring
agriculture to its pre-oil boom glory would strengthen our economy and reduce
the risk of over dependence on crude oil alone, in addition it should always be
born in mind that storage in food supply could and it has been experienced else
where result in civil unrest and political crisis. It is unfortunate that
despite all effort of the government to boost food production in Nigeria. The
acute shortages of food supply still persist and this crisis situation is
prevailing in the country.
THE ROLE OF COMMERCIAL BANK IN AGRICULTURAL
DEVELOPMENT
The commercial bank
helps the agricultural sector in developing countries in a number of ways:
They
provide loans to trade in agricultural commodities. They open network branches
in rural areas to provide finance directly to agriculturist for the marketing
of their product for the modernization and mechanization of their fares for
providing irrigation facilities for developing land e.t.c.
They also provide finance assistance
for annuals husbandry, day farming, sheep breeding poultry farmer and
horticulture. The small and marginal
farmers and landless Agricultural workers, artisans and petty shopkeepers in
rural are provided financial assistance through their regional rural bank. Thus
the commercial bank meets though credit requirements of all types of rural
people.
All these roles have contributed
greatly to the development of agricultural sector of the economy essentially,
there are three base categories of farmers and these include:
1.
Small
scale: Loan facilities are processed for
approval without tangible security. People in this category are
mainly
workers who use agriculture as a secondary business. Hence their employer
stands as security for them in the event of default repayment.
2.
Medium
scale: Farmers under this category engage more
in agricultural business. All such loans under this are forwarded to the head
office for consideration from time with defined means of repayment.
3.
Large
scale: These are full time farmers who are
engage in a large scale agricultural ventures
as such before the companies in this types of business could be considered
for approval at the head office such customer must be reputable with
maintainable account and acceptable collateral securities. Henceforth, the
roles of commercial banks remains paramount towards the development of
agriculture in Nigeria, like every other developing countries of the world.
1.1 STATEMENT OF THE PROBLEM
Despite the high number
of commercial banks established in Nigeria, yet the contribution attributed to
them to words the development of agricultural development in the area of,
insufficient flow of funds into agriculture which has contributed negatively towards
achieving and increase in agricultural productivity. This study takes a
critical look into the various methods to be use in providing solution to the
problem in order to speed up improvement in agricultural productivity.
1.2 OBJECTIVE OF THE STUDY
The contribution of commercial bank
towards agricultural development in the economy cannot be over emphasized. The
overall objective of this study is to critically examine the role commercial
banks towards the development of agricultural sector.
In
addition this work is to,
- Examine the importance of
agriculture to Nigeria economy
- Identify the problem facing
Nigeria agricultural sector.
- Analyze the loans and advance
given by the commercial
banks
to the agricultural sector. Finally, this research work is to provide solution
aimed at solving problem facing agricultural development.
1.3
SIGNIFICANCE
OF THE STUDY
The
importance of this research work cannot be under estimated. It will be of
benefit to various segments of the economy. To individual it will contribute to
their knowledge on the financing of agriculture by commercial banks.
To the business commodity, this is to
provide them with the needed research data to assist them to invest in
agricultural business.
To the government, it is to help in
policy formulation in relation to commercial banks and agricultural financing.
Again,
more significant about this study is the benefit the students will derive from
it. It will enable other researchers to make use of the finding obtained from
the research work to increase their knowledge and further their research.
1.4
SCOPE
AND LIMITATION OF THE STUDY
This
research work covers all significant contribution of
Commercial
banks towards agricultural development, using union bank of Nigeria plc Ilorin
as the case study. The study examines the annual reports and statement of
accounts wit other journals of the bank. One of the major limitations of this
study is the collection of all relevant information from the bank. The coast of
conducting the research is another limitation. There is also limited time in
carrying out the research. However, effects will be made to provide current
information concerning the study.
1.5 RESEARCH METHODOLOGY
In this sources work both primary and
secondary sources of data is used in collecting information needed for the
study. The primary sources of data consist of Oral interview with management
and staff of Ilorin bank of Nigeria plc, Ilorin and its customers.
Questionnaire is administered among the management, staff and customers of the
bank other essential information is gathered from secondary sources include
journals, billions textbook and magazines.
Data obtains is analyzed by using
simple statistical model such as percentages table.
1.6 PLAN OF THE STUDY
The study is divided
into five chapters, chapter one contains a brief background of the study
statement of the problem, significance of the study, objectives of the study,
scope and limitation of the study.
Chapter
two contains a review of related literature.
Chapter three contains research
methodology which includes method f data collection and method of data
analysis.
Chapter four contains the presentation
of the analysis of data.
Chapter five focused on the summary,
conclusion and recommendation arising from the study.
1.7
DEFINITION
OF TERMS
To
gain a through understanding of this study, an attempt has made to define the
following terminologies as they used in this research work.
AGRICULTURE: This
is used in its common parlance which
includes
production research and training in the fields of crops for story fishing and
livestock.
FARMERS:
Have been used in generic séance to cover the whole spectrum of agricultural
production.
GROSS DOMESTIC PRODUCT
{GAP}: This is an instrument which the
commercial banks holds as a security against loans obtained in the event of
default as a result of evasion or death.
ADVANCE:
These are usually granted to the banks customer either by overdraft on current
account or by loans upon a separate account.
OVERDRAFT: This
is an arrangement by which an account
holder is allowed access to fund in excess of his balance subject to stipulates
limit and duration, is the common form of short-term credit.
CREDIT: This
is sued to refer property {among} handed to a customer by a banker with the
promise to repay the sum given at a future date.
INTEREST:
This refers to the money which is paid for a loans or the use of money. This is
usually expressed as a percentage of the total loan.
SAP:
Central Adjustment Accidentals
CBN:
Central Bank of Nigeria
BIOA:
Bangui International Pour Enrique Accidental
NACB:
Nigeria Agricultural and Cooperative Bank
1.8 THE ROLE
OF COMMERCIAL BANKS IN AGRICULTURAL DEVELOPMENT
The
commercial banks help the agricultural sector in developing countries in a
number of ways.
They provide loans to traders in
agricultural commodities. They open network branches in rural areas to provide agricultural
credit.
They provide finance directly to
agriculturists for the marketing of their produce, for the modernization and mechanization
of their farms for providing irrigation facilities for developing land e.t.c.
They also provide financial assistance for animals husbandry, dairy farming,
sheep breeding, poultry farming and horticulture. The small and marginal
farmers landless agricultural workers artisans and petty shopkeepers in rural
areas are provided financial assistance through their regional rural banks.
Those regional rural bank operate under as commercial bank.
All
these roles have contributed greatly to the development of agricultural sector
of the economy essential. There are three base categories of farmers and these
include:
i. Small
scale: Loan facilities are processed for approval without tangible security
people in this category mainly workers who use agriculture as a secondary
business. Hence, their employer stand as security for their in the event of
default repayment {RBRDAs} as well as other measure both federal and state
level to enhance agricultural productivity and output. The governments have given
such priority to agricultural production because of their realization of the
contribution of a highly developed agricultural sector could make the
development of Nigerian economy. First and increase in export crop production
should supplement our foreign exchange earning. Successful attempts to bring
agriculture to its pre oil boom glory strengthen our economy and reduce the
risk of over dependence on crude oil alone. In addition, it should always be
boom in mind that storage in food supply could and it has been experienced
elsewhere result in civil unrest and political crisis. It is unfortunately that
despite all efforts of the government to boost food production in Nigeria, the
acute shortage of food supply still persists and this crisis situation is prevailing
in the economy.
AGRICULTURAL
DEVELOPMENT
In
order to tackle some of the problem confronting the agricultural sector, the
government put in place certain policies and programmed with a view of solving
them. The genesis of those policies and programmed could be traced back to
1950s and 1960s when various credit institution and programmed were established
to support and finance agricultural development. Most important of these
programmes include operation feed the nation {OFN} this was started in 1976 by military regime as a mass
enlightened and mobilization campaign to raise agricultural output mainly
through expansion of areas under cultivation.
National Accelerated Food Production
Progrmmes {NAFPP}.which was started in 1975 on a pilot phase, but was extended
to all state on the federation 1977 as a means to systematically build up
national capacity for increase food production, through the development of a
good package of technology, other agricultural input and their integration with
appropriate credit extension and marketing system.
Green
Revolution Programme {GRP}: This was launched in 1980 by the defined National
Party of Nigeria regime in the second Republic and was aimed at raising
agricultural productivity through massive use of input such as fertilizer and
improved seeds. Also, government has undertaken special project like the
agricultural development project {ADP}, the Accelerated Development Area
Programme {ADAPS}. The river basin and Rural Development Authorities.
ii. Medium
scale: Farmers under this category engage more in agricultural business.
All such loans under this are forwarded to the head office for consideration
from time with a well defines means of repayment.
ii. Large
scale: These are full time farmers who are engage in large scale
agricultural ventures. As such considered for approval at the head office such
customer must be reputable with maintainable account and acceptable collateral
securities.
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