A Comparative Analysis Of Agricultural Financing In Nigeria (a Case Study Of Umuchinemere Procredit And First Bank Plc, Enugu

This study aims to examine analysis of agricultural financing in Nigeria (A study of Umuchinmere Procredit and First Bank PLC, Enugu).  It is believed that generalization will be made on the entire nation based on the results arrived at in the research.  The project is divided into five (5) chapter to enhance understanding and convenience.  In chapter one, an introduction of the study was made.  The statement of the problems were enumerated which includes lack of credit facilities.  Decline of Agricultural production and subsequent food shortage in the country.  The chapter also includes objective of the study. Significance of the study, scope and limitations of the study and definition of terms.  Chapter two concentrated on the review of related literature.  In chapter three the research design and methodology was discussed, sources of data e.g primary sources (interviews) secondary sources (text book, papers presented at seminar etc).  Also discussed were the population and area of study, sampling of selected financial institutions. the main objective of the bank and their contributions in ensuring the development of Agriculture. Chapter four presented and analyzed the data collected.  The project was finally concluded in chapter five after which summary of the findings was made which included that the banks and other financial institutions should render supportive service to farmers and cooperative societies and encourages rural development.  Financial institutions should ensure that service and interest charges are moderate to enable famers repay loans. That government should ensure that funds allocated for agricultural productions are directed to a development bank and financial institutions for easy disbursement.    

 

Title Pagei

Approval Pageii

Dedication iii

Acknowledgment iv

Abstract v

CHAPTER ONE

1.0 Introduction 1

1.1 Background of the study 1

1.2 Statement of the Study 3

1.3 Objective of the Study 5

1.4 Research Questions5

1.5 Hypothesis Statement 6

1.6 Significance of the study 7

1.7 Scope of the Study 8

1.8 Limitations of the study 8 

CHAPTER TWO

2.0 Review or Related Literature10

2.1 The Concept of Agricultural Development 10

2.2 Problems of Agricultural Development in Nigeria 12

2.3 The Concept of Agricultural Financing 15

2.4 Agriculture Insurance 21

2.5 Main Objectives of Selected Micro Finance 23

2.6 Importance of Credit to Farmers in Nigeria 26

2.7 Sources of Agricultural Financing in Nigeria 28

2.8 First Bank Agricultural Financing 35

References 

CHAPTER THREE

3.0 Research Design and Methodology 41

3.1 Research Design 41

3.2 Area of the Study 41

3.3 Population of the study 42

3.4 Sample and Sampling Procedure42

3.5 Method of Data Collection 43

3.6 Sources of Data44

3.7 Reliability of the Instrument 45

3.8 Validity of the Study 45

CHAPTER FOUR

4.0 Data Presentation and Analysis        46

4.1 Introduction 46

4.2 Test of Hypothesis60

CHAPTER FIVE 

5.0 Summary of Findings, Recommendation and Conclusion 

5.1 Summary of Findings 69

5.2 Conclusion 71

5.3 Recommendations72

Bibliography 

Appendix 

Questionnaire 

 

Agricultural development remains very vital to the growth and development of every economy. The sector’s roles include improving food security, resource employment and poverty alleviation. Currently, agriculture accounts for the single largest portion (about 40%) of national economic output (GDP) in Nigeria (Attah; 2008). But so far, both private and public sectors investment in terms of loans and credit to agricultural development have been meager and disappointing. The private investment in agriculture in terms of banks’ credits is the least among all economic sectors. Banks are generally reluctant to finance agriculture.

For instance, from 2006-2008, the average total annual flow of bank credits to agriculture was only 2.27% of their total credit (Eboh, 2011).

In public sector investment to agriculture, within 2002-2007, federal government spends 4.3% while state governments spend on the averaged 3.4%. Moreover the long term average ratio of agriculture to GDP is about 0.07, indicating less than one tenth of the sector’s share of the GDP. This collaborates with the observation by Sackey (2011) that public policy towards agriculture in Nigeria prior to 1974 has been taxing agriculture to finance other sectors.

(Journal of Research in Pure and Applied Sciences Vol 1 No 1 June 2013 37)

The huge financing gap in agricultural sector also manifests itself in Federal government budgets. The projected federal government funding for agriculture and food security over a four year period (2008-2011) is about N935 billion. But, total federal budget for agriculture and water resources in 2008 was less than N120 billion, as against the projected funding needs of about N319 billion for 2008. This meager flow of credits does not correspond with agriculture’s status in the national economy.