THE ROLE OF COMMERCIAL BANKS IN FINANCE SMALL SCALE AGRICULTURAL.
TABLE OF CONTENTS
Title page I
Approval page ii
Table of content vi
1.1 Statement of problems
- Purpose of the study
- Significance of the study
- Statement of hypothesis
- Scope and limitation of the study
- Definition of terms
2.0 REVIEW OF RELATED LITERATURE
- Significance of small farmers
- Source of finance
- Uses of finance
- Role of commercial banks
- Factors affecting the distribution of credit to farmers
- Repayment performance in credit programme
- Problems associated with agriculture itself.
- RESEARCH DESIGN AND METHODOLOGY
3.1 sampling procedure
- Data collection
- Questionnaires design
- Statistical treatment.
5.0 SUMMARY FINDING CONCLUSION AND RECOMMENDATION
In Nigeria, agricultural like in most other developing countries the small scale farmer predominates several constraint and barriers which appear insurmountable limited the overall farming activities and if this is anything to go by, it can destroy a developing economy which heavily rest on the shoulders of small scale farmer. These small scale farmer are characterized by illiteracy, ignorance, small size of farm holding, little capital, lack of tangible asset and tenure system, low level of technology, low level of productivity, low level income, and general rural milieu. These features combined together makes the services of formal source of finance difficult to the small farmer. The resultant effect is that it becomes inevitable exposed to other informal source of finance and stands to be exploited at the slightest opportunities,
The important of credit to small scale farmer cannot be over emphasized in view of the fact that 90% of Nigerian farmers who actually feed the nation are in the category of small scale farmers. These farmers employ very little capital for their production. Unfortunately factors mentioned earlier makes it difficult for small scale farmers to have access to the service of financial institution. The banks fear that due to the problem affecting the small scale farmer, that they cannot be repay back bank loans.
Credit is a vital element in agricultural foundation without which the farmer can hardly do mush. It contributes to farmers social welfare enhances productivity, help in capital formation and continuity of income.
It is lack of adequate credit facilities that makes it impossible for farmers in our rural areas to adjust to new and improved techniques that will lead to increase output and productivity. This implies that the increase credit facilities will lead to rapid agricultural development by accelerating the rate of adoption of new and improved method and technique of farming by our rural farmers. It is in full realization of the death of agricultural product that the federal government of Nigeria has geared its efforts towards increased food production by establishing such programmers and scheme as natural accelerated food production scheme.
Agricultural and co-operative bank NACB, Rural Bank Scheme, River Basin and other Agricultural scheme provided by the third and fourth development plans respectively.
It is observe from the above that both the federal government and state government have now come to show some degree of concern for the rural farmers i.e. small scale farmers and their need for credit loan.
The Nigerian Agricultural and co-operative bank (NACB) was established by the federal republic of Nigeria in 1973 as Nigerian Agricultural development bank (NADB), which has change to the Nigerian Agricultural and co-operative bank in 1978 in order to enhance co-operative activities. The establishment of NACB was government realization of the importance of credit to agricultural production.
As a development banks, it was charged with the rate of contributing to the overall development of agricultural production and agro based industries. It authorized and paid up capital of N1million was increased to N2million in 1975 and the federal government wholly subscribed this.
The primary objective of the bank is to increase the level and quantity of agricultural production including poultry: – farming pig breading, fisheries, forestry, timber production, animal husbandry and other type of farming as well as storage and marketing of such production in Nigeria. The specific objectives are to assist in promoting rural development as well as improving income and quality of life of Nigeria rural population and make the nation self sufficient in food production. This bank grants loan for agricultural production. To encourage the commercial bank to grant loan to farmers, the federal government stipulated that at least 6% of commercial bank loans and advance raised to 15% in 1999, between 2000 and 2002 raised to 18% must be given to agricultural sector.