APPRAISAL OF OBTAINING AGRICULTURAL CREDITS/LOANS: A CASE STUDY OF OVIA NORTH EAST LOCAL GOVERNMENT AREA OF EDO STATE
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APPRAISAL
OF OBTAINING AGRICULTURAL CREDITS/LOANS: A CASE STUDY OF OVIA NORTH EAST LOCAL
GOVERNMENT AREA OF EDO STATE
ABSTRACT
The ever
determining food production in Nigeria has prompted development or
administration (military and civilian) both present and past to formulate
programmed to ameliorate or arrest this situation. One of such programmed is
the agricultural credit facilities scheme, which is being implemented through
commercial banks. Sequel to this the researcher examined the problems of
obtaining loan for financing agricultural production in Edo State.
TABLE OF
CONTENT
Chapter
One
1.1
Background to the study
1.2
Statement of problem
1.3
Purpose of the study
1.4
Significant of the study
1.5
Scope of the study
1.6
Research question
1.7
Limitation of the study
1.8
Definition of terms
Chapter Two
2.1
Review of literature
Chapter
Three
3.0
Research Methodology
3.1
Design of the study
3.2
Population of the study
3.3
Sample and sampling techniques
3.4
Instrumentation
3.5
Validation of instrument
3.6
Method of data collection
3.7
Method of data analysis
Chapter
Four
Data presentation and analysis
discussion of results
Chapter
Five
5.1
Summary
5.2
Conclusion
5.3
Recommendation
References
Questionnaires
CHAPTER
ONE
INTRODUCTION
1.1
BACKGROUND TO THE STUDY
Farmer need productive resources and these resources are acquired with owned or
borrowed fund. Agriculture is very important to the economic of most developing
countries of the world and because of this, a supply of adequate farmer finance
is essential for natural well bring.
Since agriculture is the backbone of the Nigeria economy providing employment
to about 70% of its population yet this important sector has suffered healect
since the oil boom days. Agriculture has totally declined since the early 1970s
Nigeria export crops such as groundnut, palm oil and external have evaluate
disappeared and the country is a net importer of food crops. Agriculture
recorded growth rate in 1975 at about 2.6% while the population grew at about
70% compared to 57-7% in 1993 economic growth summit (1995) the small scale
farmers according to the national agricultural policy document for Nigeria
(N.A.P.O.N) constitute over 90% of the food and fiber requirement of Nigeria on
the other hand large scale farmers produce has than 1% of farm output in
Nigeria but they tend to have greater access to farmer inputs including farm
credit or loan.
1.2
STATEMENT OF THE PROBLEM
This study is to investigate the analysis of the problem associated with
obtaining credit for financing agricultural production in Edo state. It would
be seen that many problems arise the most for mixable problem encounter by the
farmers in the area.
1. The inability of the farmers to meet the collateral
security acquired by the commercial bank is a major problem hindering
agricultural sectors. This is as a result where farmers have nothing to deposit
in the process of obtaining credit for agriculture.
2. High interest rate is another factor that
discourage farmers from obtaining credit in most commercial banks, payment of
interest involve when fund is borrowed.
3. The low educational
background of the farmers also
constitutes hindrance in obtaining agricultural credit.
4. Credit facilities are not easily accessible to
small scale farmers.
5. The bureaveratie native involved in the process of
obtaining credit ot loans for agricultural purpose have not being encourage on
the part of the farmers. It is on the note that the researcher intends to
identify some of the hindering factors in order to proffer solution.
1.3
PURPOSE OF THE STUDY
The main aim of the this study is to find the major problems of obtaining
credit or loan for financing agricultural production in Nigeria with particular
reference to Edo state. The objectives of the study are:
1. To identify the problem militating against adequate
financing of agriculture.
2. To enumerate and analyze the agricultural credit
granted to farmers in recent years.
3. To know how much the commercial banks have help in
financing agriculture.
4. To look how agriculture has developed especially in
Edo state.
5. To create awareness of the problem posed by
agricultural financing inadequacies.
6. To investigate how these problems can be tackled.
1.4
SIGNIFICANCE OF THE STUDY
1. This research study will be important to those
future researchers in economic and agricultural science who would like to use
it as a reference material or for further investigation.
2. This study is to create awareness to farmers in Edo
state, the reasons of low agricultural production and also to bring to the
notice of the general public loans for financing agricultural production in the
locality.
3. It will form a good basis to the government for the
formulation of policies.
4. To serve as encouragement to those farmers in the
area of study.
1.5
RESEARCH QUESTIONS
Some question to be tackled in the course of this study has been rise as
follows.
1. Is collateral security a problem of obtaining
credit from commercial banks?
2. Does high interest rate increase the incidence of
bad debt?
3. Does educational background hinder the potentials
of obtaining credit?
4. Is a credit facility accessible for small scale
farmers?
5. Does bureaulrate process pose a lot of problem or
obtaining loans to farmers?
1.6
SCOPE OF THE STUDY
This
study is aimed at providing details knowledge and understanding of the
operation, function and to determine the problems of obtaining loans for
financing agricultural production in Edo state through the federal government
agricultural credit guarantee scheme (F.G.A.C.G.S) found since 1977. With the
view of providing useful suggestion to ease the problem of agriculture
development in Nigeria; It is directly towards the application of problems
obtained for financing agriculture view of this more emphasis will be placed on
the success of credit facilities lending procedure as a criteria of
measurement. The performance of the commercial banks in this regard will be assessed
by using the present farmers areas to the agricultural credit facilities as
well as the hindrance which the small scale farmers faces in obtaining loans
from financial institution.
1.8
DEFINITION OF TERMS
LOAN OR
CREDIT FOR AGRICULTURE OF AGRICULTURAL CREDITS
Refers to
the process of obtaining control over the use of money, goods and services in
the present for a promise to repay at a future date.
AGRICULTURAL FINANCE: This means ways and means by which a farmers obtain
the entire necessary fund required in order to carryout agricultural
production.
INTEREST: This means the price paid for the use of borrowed
money and is usually expressed as a percent on an annual basis.
COLLATERAL:
This means anything offered as a promise of loan
repayment to be given to a lender in cast of non-payment.
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