ABSTRACT
The primary objective of this project is to examine the role of bank’s
credit facilities in financial agricultural sector with particular references
to Nigeria Agricultural Cooperatives and Rural Development banks as a case
study. The research work is entirely made up of five chapters. In chapter one,
we painstakingly examined a number of issues such as statement of problem, aims
objectives of study, significant of the study etc. chapter two, exhaustively
dealt on literature review with in-depth analysis of all the views of the
experts. Chapter three is centered on the research methodology of the study.
Chapter four gives statistical and empirical account of the work based
objectively and purely on the result of the questionnaire administered. Chapter
five conclude the work with summary and recommendation based on the empirical
findings, and references are also included.
TABLE OF CONTENT
Title page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
Table of content vi
CHAPTER ONE
1.0 Introduction 1
1.1 General
Background 1
1.2 Statement
of problem 2
1.3 Objective
of the study 3
1.4 Research
methodology 3
1.5 Scope
of the study 3
1.6 Significant
of the study 3
1.7 Limitation
of the study 4
1.8 Definition
of terms 4-
5
CHAPTER TWO
2.0 Literature
review 6
2.1 Establishment
of NACRDB 6
- 7
2.2 Aims
and objectives of NACRDB 7
-8
2.3 Organization
of the bank 8-10
2.4 Functional
and operational scheme 11
2.4.1 Micro credit 11
2.4.2 Macro loans 11
2.4.3 On lending 11
- 16
2.4.4 Special project loan 16
2.5 Source
of fund 16
2.6 Condition
for borrowing 17
- 19
2.7 Assessment
of NACRDB 19
– 20
CHAPTER THREE
3.0 Research methodology 21
3.1 Population size 21
3.2 Sample size 21
3.3 Sources of data collection 21
-22
3.4 Method of data analysis and design 22
CHAPTER FOUR
4.0 Data presentation and analysis 23
4.1 Presentation of data 23
4.2 Analysis and interpretation of data 23
-24
4.3 Problem identification 25
- 26
CHAPTER FIVE
5.0 Summary of findings, conclusion and
recommendation 27
5.1 Summary of findings 27
5.2 Recommendation 28
– 29
5.3 Conclusion 29
Bibliography 30
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND
OF THE STUDY
This research project is purposely carried out to examine the role of
financial institution to aiding, the agricultural sectors, through granting of
credit facilitates, using Nigeria Agricultural Cooperative and Rural
Development (NACRDB) as a case study.
In the year back, the Agricultural sector has been faced much difficulty
to meet up with their target due to inadequate financial assistance or credit
facility from the government.
Much researchers have been able to disclose that agriculture provide over
80% employment and that over 80% of the farming population in Nigeria reside
in the rural areas.
Hence, to develop agricultural production some important facilities have
been put in place to encourage farmers. And this bring about agricultural credit
facility.
Farmers before the introduction of the Nigeria Agricultural Cooperative
and Rural Development Bank, seek credit from other sources such as commercial
bank and private lenders which is really difficult if not unattainable due to
the stringent condition imposed on intended borrowers by lenders.
The introduction of Nigeria Agricultural Cooperative and Rural
Development Bank as a specialized agricultural bank has really relieved farmers
of the difficulties imposed by the money lenders.
Agricultural is as old s the origin of Nigeria and the development in the
area of agriculture has been a form of continuous variation.
The development of agriculture can be grouped into three stages:
1.
Pre-colonial stage
2.
Colonial stage
3.
Post colonial stage
1. Pre-colonial
Stage: It can be viewed into perspective which are stone and medieval age.
i. Stone Age: In this era, human race
were concerned with food and shelter, the method of farming then was so poor
that crops were destroyed by most of the dangerous insects such as locusts,
pest and diseases etc.
ii. Medieval
Age: This state emanates immediately after the age of stone, which was
really a way of improving various stages of stone age.
The importance of agriculture was realized by human
being. Life was some how primitive those man used animal skin for cloth others,
cutlasses and hoes were made.
2. Colonial Stage: By colonial stage,
we refer to the period that Nigeria
was actually colonies by British people and the coming of the country of
British people about some development in agricultural sector.
3. Post Colonial Stage: This was the
time that Nigeria
became a nation of their own and no longer under the control and directive of
the British people.
Agriculture was recognized as one of the main source of Nigeria income,
in the sense that, it provides for raw materials for industries and foreign
exchange for the country’s import needs. Thus, the effort production of that
the active farming population (small holder and families) constitute a central
piece of the agric deliver credit programme s designed and implemented by
NACRDB over the past decades.
1.2 STATEMENT
OF PROBLEM
With all the distance of NACARDB to farmers, numerous problems are still
persisting, which are either caused by the farmers or the bank. On the farmers
side some of the farmers hardly approach bank for loan, some do not have accounts
with the at anytime needed. On the other hand, the bank refuse to grant loan to
peasant farmers at the right time.
Among the problems are listed below:
1. Inadequate Funding: The banks are
finding it difficult to source their fund to meet the needs of the farmers.
2. Hardship in Recovery of Loan: The loans
granted to farmers are paid in half or not even paid at all. Thus, discouraging
the banks from granting loan to farmers.
3. Poor Interest Rate: NACRDB interest
rate 21% is the approved rate before recent time. The difficulty is not on the
side of serving the over head cost (as general administrative).
1.3 OBJECTIVES
OF THE STUDY
The primary objective of this research work is to examine the role of
bank credit facility on agricultural financing in Nigeria.
1.4 RESEARCH METHODOLOGY
Research methodology refers to the difference approaches or methods used
by the researchers in the collection of data. This method was equally carried
out in the collection of data in respect of bank credit facilities in financing
agriculture using NACRDB as a case study.
1.5 SCOPE
OF THE STUDY
The scope of the work covers the NACRDB operation evolution and roles towards
the development up to this year 2004.
Despite the fact that there are other sources of finance to agriculture,
this bank play a vital roles in agriculture credit facilities which boost
maximum productivity among the other sources, loans from the NACRDB have been
found to be easily attainable and less stringent than the sources.
Therefore, the study covers the workings NACRDB with regards of operation
and organization.
It is very important to note that the research work does not see to
have covered all areas concerning NACRDB
but effort have been made to cover as much as possible, the area of concerned studies
with regard to NACRDB funding or agriculture.
1.6 SIGNIFICANCE
OF THE STUDY
The important of the studies are:
1.
It serves as sources of information to other future
researcher.
2.
To stimulate the interest of the farmer and the roles
of NACRDB equally.
3.
it is a means of updating the knowledge of individuals
farmers who are benefiting from the activities of NACRDB.
4.
To bring to the notice of government and other finances
of the bank on the need to improve on their present financing of the bank.
1.7 LIMITATION
OF STUDY
This research work suppose to have contained more information than what
we have gathered but due to the following:
1.
Reluctance of must of the organization in providing the
required information.
2.
Inadequate time to enable us conduct an in-depth
research into the subject matter of this study, have hindered the production of
this research work.
3.
The financial constraints particularly at the initial
stage of this project would have halted the successful completion of the study.
4.
Non availability of sufficient literature review.
5.
Despite the above problem mentioned, the researchers
made use of his best luck by patronizing most of the bank, thereby dissenting
most of the recommended factor mostly from NACRDB, for example on member of
KABBA Branch rendered his maximum cooperation on this regard, regardless of the
fact that they are not ready to disclose their secret to any researcher. I was
opportune to get required information from a colleague who himself is
ex-student of federal polytechnic, Idah
1.8 DEFINITION
OF TERMS
Banking System: This comprises of those
financial institutions that hare to do with the acceptance of deposit and
giving of loans to customers. They include the central bank, the commercial banks,
the merchant banks and the development banks.
Collateral: It is an evidence, security
property e.g sticks or bonds, pledge as security for repayment of a loan.
Credit: Is money borrowed from someone
or from an institution by agreement with the intention or promise to pay it
back at a later date, with or without interest.
To determine whether one needs credit or not some financial aspects must
be looked into:
-
Asset and liabilities (financial standing)
-
Present and expected income (cash flow)
-
Risks involved and
-
How you plan to cover them
-
Knowledge of the industry in which you want to get
involved.
Finance: Is the management of money,
especially controlled by a government, company or large organization.
Or to provide money especially a large amount of money to pay something;
according to Longman Dictionary definition. Intensified in encouraging the
production of coca, palm oil, rubber, cotton, groundnut etc. Rearing of cattle
were also encouraged by the government.
In the first republic, some facilities were provided by the government in
order to boost the output to the agricultural sector in the country.
Some of these facilities in the country.
-
Federal Government appointed some officer to advice farmers
on what to plant and how to plant.
-
Provision of jobs by the government were made to help
in preserving agricultural product.
-
Roads were constructed to give easy accessibility to
areas where agricultural products are available for easy transport.
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