THE ROLE OF THE NIGERIAN AGRICULTURE AND CO-OPERATIVE BANK IN AGRICULTURAL FINANCING (PROBLEMS AND PROSPECTS)
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THE ROLE OF THE NIGERIAN AGRICULTURE AND CO-OPERATIVE BANK IN AGRICULTURAL FINANCING (PROBLEMS AND PROSPECTS)
ABSTRACT
The Nigerian Agricultural, Cooperative, Rural, and Development Bank’s main mission is to provide loans and advances to individual and corporate farmers.
However, there are a number of reasons why specific funding for the agricultural industry is required. The agricultural sub-sector has unique hazards that are difficult to diversify: illiteracy and ignorance; culture; interest rates, and so on.
Loan defaults occur when borrowers fail to repay principal and interest within the maturity period specified by the bank. Loan defaults have continued to rise dramatically, and this is a big deterrent to the NACRDB in terms of loan or credit extension.
Furthermore, the NACRDB is confronted with a number of issues in the course of funding agriculture. Unsystematic risk, time lag, inadequate infrastructure, loan diversion, slow rate of return, collateral, government policies, political instability, and other issues are examples of such issues.
In order to discover these challenges and the solutions, the researcher used secondary sources of data as well as, in part, primary sources of data.
INTRODUCTION TO CHAPTER ONE
1.1 STATEMENT OF THE PROBLEM
The importance of the Nigeria Agricultural and Cooperative Bank cannot be overstated. According to Ugwuanyi (2002), a number of efforts have been made. The NACB assists the agricultural sector of the economy through short, medium, and long-term financing.
This is intended to raise farmers’ problems while also encouraging them to embrace a mechanised farming approach. According to Anyanwu (1993), it is also intended to stimulate or develop work opportunities for the nation’s unemployed.
However, despite all efforts, the goal of increased production cannot be claimed to have been met. Many people are hesitant to work in agriculture and instead look for other possibilities. On the NACB’s side, it is hesitant to give credit to certain types of farmers.
What exactly is the cause of these setbacks? Could it be because of the interest rate on the loan amount? Could it be due to a loan default? Is it possible that it is due to the amount requested? Could it be because of the type of collateral involved?
As a result, the researcher plans to study the cause of all of these setbacks.
1.2 THE PURPOSE OF THE STUDY
In terms of the study’s justification, the researcher seeks to justify her decision to focus on this specific topic.
However, the researcher was inspired to write on this topic because of the NACB’s current problems with agricultural funding in society.
As a result, this study or research work will greatly contribute to improving the in-depth knowledge of those in the agricultural sector as well as the NACB on the role of the NACB in agricultural financing.
1.3 SIGNIFICANCE OF THE STUDY
The importance of this research study cannot be overstated. Individuals and groups of individuals will profit from this research endeavour, particularly those who are unaware of the significance of the NACB’s formation.
This research will also benefit those in the agricultural industry. This is accomplished by having a thorough understanding of how the NACB operates in terms of giving short, medium, and long-term credits to farmers.
Finally, those in various agricultural schools and other institutions of higher learning will profit much from this study.
1.3 DEFINITION OF TERMS
FINANCING FOR AGRICULTURE: Agricultural financing, according to Uguwanyi (1999), is the process of obtaining funds and making them available for agricultural output and consumption. That is, it entails acquiring and deploying capital for agricultural purposes.
NACB Nigeria Agricultural and Cooperative Bank was founded to bridge the financial gap in credit extended to cooperatives and the agricultural industry.
NACRDB – Nigerian Agricultural, Cooperative, and Rural Development Bank – was founded as a result of the NACB’s inability to meet its responsibilities.
NECHANISED FARMING SYSTEM:- This refers to farming using machines such as tractors, bulldozers or Catapilers, ploughs, and so on.
COLLATERAL:- This is also known as security. It is an item that a borrower deposits to a bank in lieu of the loan amount, which the bank will subsequently consider in the event of the borrower’s default.
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