ABSTRACT
This study examined Money Deposit Banks in Agricultural productivity in Nigeria using selected farmers in Ikono / Ini Local Government Areas as a case study. To accomplish the research objectives, the study adopted the survey research design while the convenience sampling technique was used to select fifty (50) respondents as sample size for the study. Instrument of the study was self developed questionnaire and the forms were personally administered. The findings revealed that some impact of deposit money banks credit on agricultural productivity in Nigeria include enhancing agriculture production, making funds available to farmers, motivating farmer for greater productivity and it increases farm products. The extent farmers obtain loans and advances from Money Deposit Banks include; great extent very great extent, small extent and very small extent. Several factors which constitute a problem facing Money Deposit Banks in financing agriculture projects were identified to include: lack of good business plan and feasibility study, provision of acceptable collateral security, inarticulate central banks of Nigeria (CBN) directives and poor loan documentation. Several factors which constitute a problem facing farmers in obtaining funds from money Deposit Banks were indicated to include: low level of education, inadequate records keeping, inability to prepare business plan and high interest charges by the banks. This study provided useful recommendations including that in order to make credit available to the agricultural sector, the banks and the government should make use of the rural banking programme. The branches of each bank in the rural community should be given free hand to give advances to rural small farmers. They should be able to act as management consultants identifying problems and suggesting solutions.
TABLE OF CONTENTS
Title page – – – – – – – – – i
Approval page – – – – – – – – ii
Certification – – – – – – – – iii
Dedication – – – – – – – – iv
Acknowledgements – – – – – – -v-vi
Abstract – – – – – – – – – vii
List of tables- – – – – – – – – viii
Table of contents – – – – – – – ix- xi
CHAPTER ONE
INTRODUCTION – – – – – – – – 1
1.1 Background of the Study – – – – – – 1-3
1.2 Statement of the Problem – – – – – 3-5
1.3 Objectives of Study – – – – – – – 5
1.4 Research Questions – – – – – – 6
1.5 Significance of the Study- – – – – – 6-7
1.6 Scope of the Study – – – – – – -7
1.7 Limitations of the Study- – – – – – 7-8
1.8 Organization of the study – – – – – – 8-9
1.9 Definition of Terms – – – – – – -9-11
CHAPTER TWO
REVIEW OF RELATED LITERATURE – – – -12
2.0 Preamble – – – – – – – – 12
2.1 The concept of Agricultural finance – – – – 12-14
2.2 The concept of Bank Credit – – – – – 14-15
2.3 Bank Credit and the Nigerian Economy – – – 16
2.4 The Roles of credit in Agricultural Development – 17
2.5 The Roles of Commercial Banks in Agricultural financing -18 -19
2.6 Problems of Banks on agricultural Financing- – 19-22
2.7 Problems of Agriculture in Nigerian – – – – 22-25
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY- – – 26
3.0 Preamble – – – – – – – – 26
3.1 Research Design – – – – – – – 26
3.2 Population of the Study- – – – – – 26
3.3 sample and Sampling Techniques – – – – 26-27
3.4 Instrumentation- – – – – – -27-28
3.5 Method/Plan for Data Analysis- – – – -28
3.6 Problems of Data Collection – – – – 28 -29
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND
INTERPRETATION
4.0 Preamble- – – – – – – – -30
4.1 Analysis of research questions – – – – 30-31
4.1.1 Analysis of research question One- – – 30-31
4.1.2 Analysis of research question Two – – – 32-33
4.1.3 Analysis of research question Three – – – 34-35
4.1.4 Analysis of research question Four – – – 36-37
4.2 Discussion of Findings – – – – – 38-40
CHAPTER FIVE
SUMMARY OF FINDINGS CONCLUSION AND
RECOMMENDATIONS
5.0 Preamble – – – – – – – -41
5.1 Summary of Findings – – – – – -41-42
5.2 Conclusion- – – – – – – – 42
5.3 Recommendations- – – – – – -42-44
References – – – – – – – 45-46
Appendix- – – – – – – – 47-55
LIST OF TABLE
Table 4.1.1 Response to Research Question One
Table 4.1.2 Response to Research Question Two
Table 4.1.3 Response to Research Question Three
Table 4.1.4 Response to Research Question Four
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
According to central Bank of Nigeria C.B.N (2000),
Nigeria is endowed with huge expanse of fertile land, rivers, streams, lakes forests and grasslands as well as a large active population that can sustain highly productive and profitable agricultural sector which can ensure self – sufficiency in food and raw materials for the industrial sector and as well provide gainful employment for the teeming population and generate foreign exchange for the economy. Ironically, the reverse is the case-several factors account for poor performance of the sector, poor access to modern inputs and technology, and lack of optimum credit supply (Enyim, Ewno and Okoro 2013). Aside the problem of poor access to modern technology, the major bane of agricultural development in Nigeria is low investment finance (salami and Arawomo, 2013). According to Udih (2014) Bank credit is expected to impact positively on the investible sectors of the economy through improved agricultural projects will not only promote food security, but also enhance the entrepreneurship performance of our young investors concluding that this is borne out of the expectation that a good match between adequate bank credit and agricultural entrepreneurship will ensure massive agricultural productivity. Qureshi, Akhtar and Shan (1996) in their contribution argued that Banks credit has the capacity to remove the financial constraints faced by farmers as it provides incentives to enable farmers to switch quickly to new technologies which can enhance the achievement of rapid productivity and growth.
Ijere (1996) viewed banks credit as a catalyst that can activates the engine of growth enabling it to mobilize its inherent potentials and to advance in the planned or expected direction. In support of the same view, Umoh (2003) maintained that banks credit constitutes the power or key to unlock talent talents, abilities, visions and opportunities, which in turn act as the mover of economic development Banks credit has a significant contribution to economic development by enhancing production and productivity and thus higher income and better quality of life to the people (well, 1970). However from available statistics of commercial banks total sectoral credit distribution in Nigeria, the allocation to the agricultural sector, given the importance of the sector is insignificant. For instance, credit allocation to the sector fluctuated between 6.98% and 10.66% in 1981 to 1985, between 10.66% and 16.15% in 1985 t0 1990, between 16.15% and 17.55% in 1990 t0 1995. It declined sharply to 8.07% in 2000, 2.46% in 2010, and fluctuated between 1.67%, and 3.44% in 2005, 1.67% in 2010, and fluctuated between 1.67%, and 3.44% in 2010 to 2013 (source: Central Bank of Nigeria CBN statistical bulletin, 2013).
1.2 STATEMENT OF THE PROBLEM
Nigeria like most other countries in the African continent is Not only endowed with vast agricultural farmland, but also conducive geographical condition that favours agricultural production throughout the year. Despite this great potential, there is not much to show for it (Salami and Arawomo, 2013). Several studies in this area including Enyim, Ewno and Okoro (2013), have identified poor credit supply as one of the factors accounting for the poor performance of the agricultural sector in Nigeria. According to Obilor (2013), banks precisely the money deposit money banks obviously have no kin interest in agricultural finance. In order to encourage the banks, the government established the Agricultural credit Guarantee scheme (ACGS) to provide guarantees against inherent risk in agricultural lending. This measure could not achieve the intended objectives because agricultural being both labour and capital intensive venture requires huge capital outlay (Nwankwo, 2013). Consequently, is relying on massive importation of basic food items and raw materials for industrial inputs (Itodo, Apeh and Adeshima, 2013). The resultant effect of the high cost of living coupled with high level of unemployment on the common man is beyond reasonable imagination obviously, the government’s effort to fortify the Nigeria agricultural sector has not yielded the desired result (Udensi, Orebiyi, Ohajianya and Eze, 2012). Thus the need for further investigation in this area cannot be overemphasized.
1.3 OBJECTIVES OF THE STUDY
The objectives of the study include:-
To examine the impact of Money Deposit Banks credit on agricultural productivity in Nigeria.
To examine the extent farmers can obtain loans and advances from Nigeria Money Deposit Banks.
To evaluate the extent to which Money Deposit
Banks constitutes a problem to financing small scales enterprises in Nigeria?
To identify problems encountered by farmers in obtaining funds from Deposit Money Banks.
1.4 RESEARCH QUESTIONS
What are the impact of Money Deposit Bank’s
credit on agricultural productivity in Nigeria?
To what extent can farmers obtain loans and advances from Nigerian Deposit Money Banks?
What are the problems facing Money Deposit Banks in financing small scale enterprises in Nigeria?
What are the problems encountered by farmers in obtaining funds from Money Deposit Banks in Nigeria?
