THE ROLE OF COMMERCIAL BANK IN AGRICULTURAL FINANCING

ABSTRACT

The object of this study is to determine the vital role played by commercial banks in Agricultural financing in Enugu State, which has been a major handicap to Agricultural Development today.

The study arose from the fact the question to achieve self sufficiency in food produce is one of the highest priority areas facing most of the world’s people today

Chapter one deals with statement of the problems, introduction, purpose and significant of the study, scope mid limitation of the study, definition of term.

Chapter two deals with reviews of related literature, which includes policy and means to boast agricultural scheme, types of loan factor and in agricultural financing.

Chapter three deals with research design & methodology. Sources of data location of data, and method of data collection.

Chapter four deals with finding and summary.

Chapter five deals with conclusion and recommendation.

DEDICATION

This book is dedicated to my parent and sponsor for their parental care and their advises.

And also to Almighty God, To God be the glory.

ACKNOWLEDGEMENT

In this project writing certain persons at different times made significant and note worthy contributions its successful completion. Notably among these people is my project supervisor. Mr. Ikechionwu for his exhibition of patience and invaluable advice during the course of writing this project cannot be measured.

I hereby express my gratitude to my friends, Lucia, Ifeoma, Edith and Uzoma for their unquantitiable contribution in providing me with some relevant need for making of this project and also Mr. Seyi of C.O Patrick of Agric Department of Afric bank plc, Enugu for the provision of vital information essential for this work.

I am also very grateful to my brothers, Onuora Odoh & Monday Odoh for their cares and financial assistance.

Finally, I own the greatest gratitude to God for his mercy has helped me through this work successfully.

TABLE OF CONTENT

PAGES

TITLE PAGE                                                                    i

CERTIFICATE                                                                 ii

DEDICATION                                                                  iii

ACKNOWLEDGEMENT                                                iv

ABSTRACT                                                                      v

CHAPTER ONE

1.0. INTRODUCTION

1.1.         STATEMENT OF PROBLEM

1.2.         PURPOSE / OBJECTIVE OF STUDY

1.3.         SIGNIFICANCE / IMPORTANT OF STUDY

1.4.         DEFINITION OF TERMS

CHAPTER TWO

2.0. REVIEW OF RELATED LITERATURE.

2.1 POLICY& MEANS TO BOAST AGRICULTURAL

2.2 FINANCING

2.3 AGRICULTURAL CREDIT GUARANTEE SCHEME

2.4 AGRICULTURAL INSURANCE SCHEME

2.5 FACTORS AND RISK IN AGRICULTURE IN

2.6 NON AGRICULTURAL FINANCING.

2.7 CONSTRAINT TO AGRICULTURAL FINANCING BY BANKS.

CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 RESEARCH DESIGN

3.2 DATA COLLECTION

3.3 LOCATION OF DATA

3.4 SOURCES OF DATA

CHAPTER FOUR

4.0 SUMMARY OF FINDING

CHAPTER FIVE

5.0 CONCLUSIONS AND RECOMMENDATION

CHAPTER ONE

INTRODUCTION

Agriculture is defined as the science or practice of farming ie cultivation and production of raw materials for industries. It is well known that farming is the oldest occupation in the world and indeed it remain till date, one in which the largest number of people are engaged. The vast majority of the population of the world, depend on its more complex sense, agriculture is basically concerned with the production of food, which is the basic necessity of life.

The problems of capital security in agricultural production in most developing nation is generally giving cause for concern, because of the huge capital involvement. As a result of this development, subsistent agriculture now cultivate crops only for themselves and their immediate families hence the need for commercial banks to participate actively in agricultural financing materials for key industries and a major foreign exchange earners has further added to its premience among all human occupation.

As a business, it cannot be carried out extensively unless funds are available for maintenance replacement and capital equipments procurement and for other expenses.

THREE TYPES OF CREDIT ARE USUALLY REQUIRED.

(A) Short term credit to financial yearly planting operations, seed, fertilizer and farm expenses until the crop is sold.

The amounts involved here might not be credit in most predominantly felt by small farmers have little or no savings upon which to hang on.

(B) Medium term loan (longer than one planting year but less than three years). This is needed for acquisition of breeding stock and cheap with relatively short life.

© Long-term credit necessary to acquire major machines and equipments repairs and maintenance of farm lands, buildings, storage facilities.

1.2     STATEMENT OF THE PROBLEM

In this age of expanded business activities around the world especially in Nigeria. Agriculture more than ever needs financial assistance in form of bank loan to meet the increasing need for food production.

Obtaining such loans however has not be easy for farmers as a result of collection security, lack of proper accounting records and management among other limiting factors.

In spite of the importance of oil in the economy today, agriculture still remains the main stay of the Nigerian economy as it provides the greatest avenue for employment income of food for the Nigerian population. Its intrinsic position as a source of raw material for agricultural credit.

Agricultural credit therefore is a necessary ingredient in agricultural practices and in farm productivity especially it supplied on sufficient quantity and efficiently used. However, credit is only one of the “essential” for expansion and modernization, for credit pe-se, is not entirely inevitable, but a necessary key to a more prosperous future.

The commercial banks on their part has been replaced at tight situation in their bid to achieve what might be an optional level in banking lending.

1.2     PURPOSE / OBJECTIVE OF STUDY

It is a living concept among the people today that low returns to agriculture are entirely as a result of lack of finance. It is against this background supported by