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THE IMPACT OF DEVELOPMENT BANKS ON THE NIGERIAN AGRICULTURAL SECTOR
A CASE STUDY OF NACRDB.
The present food crisis in Nigeria is a multi-facial one, which led to the writing of this project. The key aim of this study was to find out the extent to which the Nigeria agricultural Co-operative rural and development bank had influenced the output of the nation’s agricultural sector and examine the operations of the banks. In course of this study, we found out that the bank has not had much impact on the nation’s agricultural sector. We recommend that government should channel more funds to the bank and to restructure the conditions for giving loans, so that the small scale farmers can have access to more loans/credits
TABLE OF CONTENTS
Table of Contents v
CHAPTER ONE: INTRODUCTION
1.1 Background of the study 1
1.2 Statement of problem 2
1.3 Objective of the study 5
1.4 Method of study 5
1.5 Hypothesis 7
1.6 Significant of study 7
1.7 Scope and limitations of study 8
1.8 Organization of the study 8
CHAPTER TWO: LITERATURE REVIEW AND THEORETICAL BACKGROUND
2.1 Definition of key concepts 10
2.2 Approaches of development 11
2.3 Development banking in Nigeria 18
2.4 Focus on the Nigeria agricultural co-operative and rural development bank 20
2.5 Source of funds 24
2.6 Operation of the NACRDB 25
2.7 Lending performance of the NCRDB 29
CHAPTER THREE: METHOD OF STUDY
3.1 Research process 30
3.2 Sampling process 31
3.3 Questionnaire design 31
3.4 Data collection 32
3.5 Data analysis techniques 33
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA
4.1 Activities of NCRDB in the study area 34
4.1.1 on lending scheme 34
4.1.2 Direct small holder scheme (SHS) 35
4.1.3 Special small holder loan scheme 35
4.1.4 Second livestock development project (SLDP) 36
4.1.5 Direct investment loan scheme (DILS) 36
4.1.6 Marketing loan scheme 37
4.1.7 Workers scheme 37
4.1.8 NCRDB rural women credit scheme 37
4.2 Advances and loans/credits to farmers 38
4.3 Promotion of agricultural development by NACRDB 43
4.4 Beneficiaries of NCRDB advances/loans 44
4.5 Challenges/problems faced by NACRDB government response (source) 45
5.1 Summary 49
5.2 Conclusion 50
5.3 Recommendations 52
5.3.1 Recommendation for policy 52
5.3.2. Recommendations for further studies 54
Appendix I 56
Appendix II 57
1.1 BACKGROUND OF THE STUDY
Development is an all-embracing process. It implies the ability of the society to determine and regulate its internal and external relations. Development is an essential process for nay country that is not satisfied with its present status. Many aspects exist on this issue of development i.e political, social economics, technological etc.
In this work we more concerned with the economic development. Development economics can be defined as “the process whereby the real per capital income of a country increase over a long period of time subject to the stipulations that the number of the absolute poverty lines does not become more unequal”, (Meier, 1984).
Also it can be defined as the process of improving the economy’s ability to satisfy the wants and needs of the people. (Amos Web Economic dictionary).
Different scholars Dudley seers 1969, Akin Mobogunje (1980), Akakpan, (1987), Mac (1981) have viewed development variously, such views include, viewed it as a process of economic growth, as an objective, modernization process, distributive justice, socio-economic transformation integrated rural development, coca, robber, cotton and groundnut.
Whichever way one decides to look at development the approaches includes, export commodities etc.
Nigeria, being a less developed country, but with a burning desire to develop, set up some development banks. Which include Nigeria industrial development banks (NIDB).
1. Nigeria bank for commerce and industry (NBCI)
2. Federal mortgage bank of Nigeria (FMBN)
3. Nigeria agricultural and cooperative bank (NACB) presently called rural development bank (NACRDB). Or focus in this study is on the Nigeria agricultural co-operative and rural development banks (NACRDB).
1.2 STATEMENT OF PROBLEM
The agricultural sector is important for its major contribution to any economy. The development of an economy is partly dependent on increasing the productivity of the agricultural sector through the provision of food stuff for the growing people (population), raw materials for the industries and the exportation of primary products for foreign exchange etc.
The sector played these roles every well before the discovery of oil in the 1960s which dramatically shifted the government’s attention away from agriculture. The result was agriculture decline wer are now witnessing with the oil bopin the 70’s tis made the agricultural sector less altercative. This led to the export of crude oil sen as an easier way of earning foreign exchange.
It is important for us to note that between 1960 and 1970 the agricultural sector accounted for over 60 percent of the country’s gross national product (GNP), recording 63.4 contributions had dropped to 23.4 percent.
“the decrease in the contribution of the agricultural sector could e traded to factors which include; misplaced government priorities predominance of primitive farming systems and in adequate supply of credit to the sector (Sule, 1986).
Lack of credit availability seems to be the most vital of all the impediments, this is because for an economy to meet the aggregated demand for agricultural product for both food stuff and raw materials for industries, the sector will require modern facilities and these machines require large amount of capital.
Agricultural credit may be said to be funds borrowed by individual farm business and marketing corps and livestock products (Halerow, 1959).
The federal government having known that for the agricultural sector to function properly, large amount of capital would be needed. This was the reason why the federal government established the Nigerian agricultural co-operative and rural development bank (NACRDB), for the purpose of granting credit to players in the sector. Since the establishment of (NACB) presently called (NCRDB) in 1973 with the sole aim of improving the level and quality of all aspect of agricultural production.
The major question now is what impact has this bank had on the agricultural sector in Nigeria since its inception.
1.3 OBJECTIVES OF THE STUDY
The objectives of the study are as follows:
1. An examination of the activities of the Nigeria agricultural co-operative and rural development banks in the country.
2. An analysis of the procedures of granting advances, loans or credit to farmers.
3. an ascertainment of how useful the institution have been in promoting agricultural development.
4. A determination of the categories of the banks beneficiaries of its advances i.e. whether small, medium, or large scale farmers.
5. An evaluation of the operation challenges/problems of the NACRDB.
1.4 METHOD OF STUDY
Questionnaire on the subject was administered to randomly selected famers that cover some selected areas of the state. Most of the question drawn of are open ended as they concerned perceptions, preference, sex, age, level of education, sources of funds, the number of attempts made to obtaining loan from the banks etc.
In addition, group discussion in Oyibo local government area of rivers state was conducted in some of localities visited to have a first-hand knowledge of the issues under study.
Also, the NACRDB branch in the state was requested to respond to questions concerning the number of customers that avail themselves the services of the bank, the criteria for disbursement of loans, the number of the loan defaulters. If any, whether or not farmers use such loans for the intended agricultural purpose, the nature of problems of any, faced in performing their role etc.
We also make use of the library faculties going launch magazines, newspapers and other useful documents journals and other scholastic publications.
H01: in this study we hypothesized that NACRDB activities have led to an increase in the output of the Nigeria agricultural sector.
H02: the establishment of the NACRDB has not led to an increase in the output of the Nigerian agricultural sector.
1.6 SIGNIFICANCE OF STUDY
The study has immense benefits for:
1. The Nigerian farmers how can now know the type of financial services being offered by NACRDB and possibly to take advantage of it.
2. The NACRDB institution to develop targets to reaching the people it desires.
3. The NACRDB institution to develop more schemes to enable NACRDB to re-appraise its role to improve on its services in the most desired direction.
4. The Nigeria populace at large as there will be the solution of the problem of low agricultural productivity through the acquisition of better or improved farming technologies and techniques in showed by improved credit facilities ultimate or overall being the generation at the increased agricultural productivity and additional employment for the people and above all enable Nigeria achieve a strong economic base.
1.7 SCOPE AND LIMITATIONS OF STUDY
In order to assist the impact of NACRDB on the Nigerian agricultural sector, we hope to visit the headquarters of NACRDB in Kaduna, the branch office in the state and also interview some of their officials.
Due to the time and monetary constraints we will not be able to cover all farm sites and also will limit my assessment to limited farm sites. We will also interview some beneficiaries of NACRDB credit facilities in the state.
The organization of this work takes the following format; chapter one is the general introduction which explains the purpose at this study and the statement of problem. The statement of hypothesis, scope and limitations as well as the method of the study incudes in this section.
Chapter two with a review available literature on the subject of study to establish the theoretical framework.
Chapter three deals with the research design, sampling procedure adopted questionnaire design, data collection and problem uncounted in the process.
Chapter four deals with the problems of agricultural credit, questionnaire analysis, data on NACRDB staffs and appraisal of NACRDB on agricultural development.
Chapter five deals with the conclusion; summary conclusion, major findings, recommendations.