THE ROLE OF FINANCIAL INSTITUTIONS IN AGRICULTURAL DEVELOPMENT IN NIGERIA

 (A CASE STUDY OF UNION BANK)

ABSTRACT

The research on the financial institutions in agricultural development in Nigeria” A case study of Union Bank Plc was necessitated by the fact that the agriculture development has been on issue of great concern in Nigeria. The financial institutions particularly Union Bank Plc has played to the development of this sector are critically examined in the study. The study is also aware of the pass role of agriculture in the development process when cocoa and rubber products were our major source of revenue. The purpose of the study includes ways in which the Nigeria agriculture and financial institutions particularly Union Bank Plc have been trying to revamp the agricultural sectors, highlighting some of the problems which prevent the full realization of objectives of Union Bank Plc and finding solution to some of its problems. The research also includes the procedure methods used in collecting data and other important information. The primary data method is the first method used to collect data. All the information gathered in this method were mainly through personal interview. The other method termed participant observation affords the one opportunity to watch the social settings and attitudes of the people under references. Finally, the work has tried to examine the problems militating against small scale farmers and the full realization of Union Bank Plc objectives is agricultural development. Some policy recommendations that will help improve agricultural sector were made, these include the best policy formulation aimed at revitalizing the agricultural loans, increased rural banking (new branches and mobile banking scheme) favourable agricultural produce marketing policies, adequate infrastructural development and agriculture research and extension services.  Also for policies to succeed, state government and their agencies are required to pay their loan in time so as to make the bank program work. Debts to Union Bank should be promptly paid without their liquidity will be adversely affected and of course limits the recycling of loanable funds. All these when needed in policy making will enhance sound agricultural development through the role of financial institution.

TABLE OF CONTENTS

CHAPTER ONE: INTRODUCTION     

Background of the study

Objectives of the study

Statement of the problem

Scope of the study

CHAPTER TWO: LITERATURE REVIEW  

Agricultural credit in Nigeria

Problem of financing the rural sector

Agriculture by banking

Agricultural credit development

Objectives of the bank

Function of the bank

CHAPTER THREE: METHODOLOGY        

Population size

Method of data collection

Research instrument

Method of data analysis

CHAPTER FOUR:      

PRESENTATION AND ANALYSIS OF DATA

Presentation of data and Analysis of data

CHAPTER FIVE:       

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION 

Summary of findings

Conclusion

Recommendation

BIBLIOGRAPHY       

QUESTIONNAIRES            

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

          Agricultural developments in Nigeria were established during the third National Development Plan (1975-1980) to enhance agriculture and food production. These are World Bank assisted projects consisting of an input delivery and credit supply system.

          However the role of financial institution in agricultural development involves ways and means by which a farmer obtains the entire necessary fund required in order to carry out agricultural production. And it also deals with the supply of demand for funds in agricultural sector of the economy. Where a farmer has a sufficient capital of his own to carry out farm production he can then obtain credit from the best available sources.

Agricultural finance is playing significant role in the development of the agricultural sector because adequate fiancé is required by farmers to establish economic size farms or large scale farms, and to expand existing farms. Adequate finance also brings significant changes in the structure of agriculture. This is because finance enables the acquisition of machinery and farm equipment to substitute labour use and the purchase of other farm inputs.

          The use of finance in farming leads to rapid increase in farm land value which necessitates the farmers to look outward for fund.

          Agricultural finance from co-operative societies is very important in communities where credit institutions such as commercial banks are lacking; farmers who belong to a co0operative society can often get inputs against liens over produce for sale through the societies. Credit it normally limited to goods and services, but cash loans are sometimes made.

          Therefore, agricultural fiancé is development are has been made mandatory in Nigeria through government directives on rural banking and the lending of a certain percentage of the banks loanable fund or deposit to agricultural sector of the economy.

          As a result of the Nigeria enterprises 1972, the federal government of Nigeria acquired banks shares.

However, agriculture is very important in most developing countries.

          The purpose of agricultural or land Banks is to help in the development of agriculture with the supply of credit. It requires to provide short and long term loans to farmers to carry our agricultural production.

OBJECTIVES OF THE STUDY        

          The objectives of this study are

1.     To examine the impact role of financial institutions in agricultural development

2.     To examine why there is decline in agricultural production

3.     To examine the ways and means by which a farmer obtains all the necessary fund required in order to carry out agricultural production

STATEMENT OF THE PROBLEM

          The following are some of the statement of problem

1.     The low educational background of some of he farmers makes it difficult for majority of the farmers to get information about the existing credit facilities and the procedure involved in getting such loans

2.     Farmers in some cases do not get their disbursement from the ministries loan units in good time for finely operation

3.     Inadequate supervision of individual farmers bring about difficulty in recovery loans that has been given to farmers

4.     State agencies do not reach the number of farmers originally targeted

5.     Funds to other project that is not originally included in the programme without due consultation bring about difficult in loan recovery

6.     Most, farmers do not have the required collateral to obtain loan

7.     There are many loan defaulters and this prevents other farmers from benefiting

8.     Too many risks in farming. There is risk of crop failure as a result of disease s and pest, prices of products may fall after harvest

SCOPE OF THE STUDY

          The study is reviewing the effects role of financial institutions in agricultural development in Nigeria. This is only a case study since the result will be directly relevant to financial institution in agricultural development in Nigeria and the society at large