THE ROLE OF FINANCIAL INSTITUTIONS IN THE DEVELOPMENT OF AN ECONOMY (A CASE STUDY OF NIGERIAN AGRICULTURAL AND CO-OPERATIVE BANK, OGUI – ENUGU)
INTRODUCTION
1.1 THE STUDY’S BACKGROUND
Banking in Nigeria has undergone dramatic changes in the last decade, and the industry has grown far beyond optimistic expectations. Over time, the number of banks increased, as did the variety of banks. Banking operations were significantly deregulated, competition increased, and banks were forced to be more innovative and service oriented.
Nigerian Agricultural, Cooperative, and Rural Development Bank (NACRDB) COMES IN AS A FINANCIAL INSTITUTION THAT PROVIDES MEDIUM AND LONG-TERM CREDIT FOR THE CREATION OR EXPANSION OF ECONOMIC AGRICULTURAL, COMMERCIAL, AND INDUSTRIAL ENTREPRISES. It is mostly set up by the government.
Agriculture is one of the sectors in the Nigerian economy that is critical to its economic growth and development. It plays an important role in the economy by providing food, increasing domestic savings, providing foreign exchange earnings, employment, raw materials for the industrial sector, and increasing the country’s GDP.
Prior to the establishment of the NACRDB, the government tried a number of other measures to encourage agriculture in the country, but they all failed the economy. These Nigerian Agricultural, Co-operative, and Rural Development Banks were established in search of an efficient agricultural financing institution.
1.2 THE PROBLEM’S STATEMENT
The Nigeria Agricultural, Cooperative, and Rural Development Bank has been identified as a key driver of meaningful economic transformation. Among the issues discussed are the bank’s problems.
1.Inadequate funding: Development financing necessitates a large capital outlay, but the bank’s available funds are small in comparison to competing needs.
2.Misconception of bank loans: Most development finance recipients believe, incorrectly, that the funds borrowed are part of their nonrefundable share of the national cake.
3.Extremely broad responsibilities: Combining the responsibilities of three different institutions by one bank appears to be an impossible task for the bank.
4.Inadequate data: NACRDB lacks statistics and information for the bank’s programmers to plan effectively.
1.3 THE STUDY’S PURPOSE / OBJECTIVE
The following are some of the goals of this research project.
1.To critically examine the bank’s contributions to the country’s economic development.
2.To identify any issues that are impeding the bank’s ability to carry out its responsibilities.
3.To assess the level of government contribution received by banks.
4.Determine the impact of the bank’s failure on the economy, if any.
1.4 THE STUDY’S IMPORTANCE
The government will benefit greatly from this research on the role of Nigerian agricultural, cooperative, and rural development banks in the Nigerian economy. As a result, the government will be able to see reasons why it should allocate more funds to the bank. Investors, farmers, and other development finance recipients stand to benefit greatly from this research; the findings are critical to them.
By repaying the money borrowed from the bank, they will be able to formulate more realistic and infallible honest policies/attitudes, allowing the institution to recycle the funds. Finally, this research will be used as a resource for future research.
THE ROLE OF FINANCIAL INSTITUTIONS IN THE DEVELOPMENT OF AN ECONOMY (A CASE STUDY OF NIGERIAN AGRICULTURAL AND CO-OPERATIVE BANK, OGUI – ENUGU)
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