TABLE OF CONTENTS
TITLE PAGE i
CERTIFICATION ii
DEDICATION iii
ACKNOWLEDGEMENT iv
PROPOSAL vi
TABLE OF CONTENTS vii
CHAPTER ONE
- Introduction 1
1.1 Statement
of the Problem 6
1.2 Objective
of the study 7
1.3 Significant
of the Study 7
1.4 Scope
and Limitation of the Study 8
1.5 Research
Methodology 9
1.6 Plan
of the Study 9
1.7 Definition
of Terms 10
1.8 The Roles of Commercial Bank in
Agricultural Development 11
CHAPTER TWO
2.0 Introduction 15
2.1 An Overview Of The Agricultural Sector In
Nigeria 18
2.2 Effort Nigeria Agricultural Found Cooperative
Bank
Towards Agricultural Financing 19
2.3 Problem Of Finding Agriculture By
Commercial Banks 20
2.4 Problems Arising From Government Policies 25
CHAPTER THREE
- Historical Background Of Union Bank Plc 29
- Organization Structure Of Union Bank 31
- Methods Of Data Collection 32
- Methods of Data Analysis 33
- Limitations To Methodology 34
CHAPTER FOUR
4.1 Data
Presentation and Analysis 36
4.2 Data Presentation and Analysis of Personal
Data
of the Bank Staff 37
4.3 Analysis of Responses Received From Bank
Staff 39
4.4 Analysis of the Responses to Question
Directed to the
Customers Farms 42
4.5 Hypothesis Testing 48
CHAPTER FIVE
REFERENCES 56
CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND
OF THE STUDY
In most development countries, like Nigeria agricultural sector is both the main traditional pursuit and key to sustained growth of the modern economy. Economic growth has gone hand in hand with agricultural production stagnation; in agriculture is the principal explanation of poor economic performance. While arising agricultural productivity has been the most important basis for successful industrialization. Among the roles conventionally ascribed to the agricultural sector in a growing economy are those of;
Providing adequate food for an increasing population supplying raw materials to a growing industrial sector, constituting then major sources of employment, earning foreign exchange through commodity export and providing for the product f the industrial sector.
Agricultural is thus seen as the
backbone of the economy. Nigeria is a predominantly an agricultural economy and
as long as she remains so the future of the sector in performing its role
become important in the early 1950s agricultural play a crucial in our economic
development as a nation.
It provided employment to millions of
Nigeria and over seventy five percent {70%} of the labour force mostly from
rural areas. In golden agriculture years, contribution from this sector
accounted for about seventy percent [70%} of the Goss Domestic Product (GDP).
Its percentage contribution however has fallen drastically in recent years due
in part to boom in petroleum industry and the growth of industrial sector.
Having
said all these, it is however unfortunate to say that the agricultural sector,
despite its indispensability to the economic survival of the country is
seriously affected by several predicaments which may under its contribution to
the economy. One of the most predominant of them is that of the financial
problem faced by the farmers. Much of the family holdings in Nigeria operate
agriculture at small scale level.
The inadequate domestic food production was reflected in Nigeria’s massive food imports, especially in the 1970s to argument domestic supply.
To
solve the financial problem faced by the framers commercial banks have crucial
to play towards agricultural development in the nations economy. The commercial
banks have to come to the aid of the extending credits to the farmers at
reasonable rate of interested. They are also to provide them with essential
consultancy programmes for better agriculture. Henceforth, theories of
commercial banks remains paramount towards the development of agriculture in
Nigeria, like every other developing countries of the world.
AGRICULTURAL
DEVELOPMENT
In order to
tackle some of the problem controlling the agricultural sector, the government
put in place certain policies and programmes with a review of solving them. The
genesis of those policies and programmes could be traced back to 1950s and
1960s when various credit institutions and programmes were established to
support and finance agricultural development. Most important of these
programmes include, Operational Feed the Nation [OFN] this was started in 1970
by then military regime as a mass enlightenment and mobilization campaign to
raise agricultural output mainly through
expansion of areas under cultivation. National Accelerated Food Production
Programmes [NAFPP].Which was started in 1973 on a pilot phase but was extended
to all state on the federation 1977 as a means to systematically build up
national capacity for increase in food production through the development of a
good package of technology other agricultural input and their integration with
appropriate credit extension and marketing system.
Green Revolution Programme {GRP}: This was launched in 1980 by the defined National Party of Nigeria regime in the second Republic and was aimed at raising agricultural productivity through massive use of input such as fertilizer and improved seeds. Also the government has undertaken special project like the agricultural development project {ADP}, the Accelerated Development Area Programme {ADAPS}. The river basin and Rural Development Area Programme [ADAPS} as well as other measure both at federal and state levels to enhance agricultural production because of their realization of the numerous contribution of a highly developed agricultural sector could make the development of a highly developed agricultural sector could make the development of Nigerian economy. First and increase in export crop production should supplement out foreign exchange earnings. A successful attempt to bring agriculture to its pre-oil boom glory would strengthen our economy and reduce the risk of over dependence on crude oil alone, in addition it should always be born in mind that storage in food supply could and it has been experienced else where result in civil unrest and political crisis. It is unfortunate that despite all effort of the government to boost food production in Nigeria. The acute shortages of food supply still persist and this crisis situation is prevailing in the country.
THE ROLE OF COMMERCIAL BANK IN AGRICULTURAL DEVELOPMENT
The commercial
bank helps the agricultural sector in developing countries in a number of ways:
They
provide loans to trade in agricultural commodities. They open network branches
in rural areas to provide finance directly to agriculturist for the marketing
of their product for the modernization and mechanization of their fares for
providing irrigation facilities for developing land e.t.c.
They also provide finance assistance
for annuals husbandry, day farming, sheep breeding poultry farmer and
horticulture. The small and marginal
farmers and landless Agricultural workers, artisans and petty shopkeepers in
rural are provided financial assistance through their regional rural bank. Thus
the commercial bank meets though credit requirements of all types of rural
people.
All these roles have contributed
greatly to the development of agricultural sector of the economy essentially,
there are three base categories of farmers and these include:
- Small
scale: Loan facilities are processed for
approval without tangible security. People in this category are
mainly
workers who use agriculture as a secondary business. Hence their employer
stands as security for them in the event of default repayment.
- Medium scale: Farmers under this category engage more in agricultural business. All such loans under this are forwarded to the head office for consideration from time with defined means of repayment.
- Large scale: These are full time farmers who are engage in a large scale agricultural ventures as such before the companies in this types of business could be considered for approval at the head office such customer must be reputable with maintainable account and acceptable collateral securities. Henceforth, the roles of commercial banks remains paramount towards the development of agriculture in Nigeria, like every other developing countries of the world.
1.1 STATEMENT OF THE PROBLEM
Despite the
high number of commercial banks established in Nigeria, yet the contribution
attributed to them to words the development of agricultural development in the
area of, insufficient flow of funds into agriculture which has contributed
negatively towards achieving and increase in agricultural productivity. This
study takes a critical look into the various methods to be use in providing
solution to the problem in order to speed up improvement in agricultural
productivity.
1.2 OBJECTIVE OF THE STUDY
The contribution of commercial bank towards agricultural development in the economy cannot be over emphasized. The overall objective of this study is to critically examine the role commercial banks towards the development of agricultural sector.
In
addition this work is to,
- Examine the importance of
agriculture to Nigeria economy
- Identify the problem facing
Nigeria agricultural sector.
- Analyze the loans and
advance given by the commercial
banks
to the agricultural sector. Finally, this research work is to provide solution
aimed at solving problem facing agricultural development.
- SIGNIFICANCE
OF THE STUDY
The
importance of this research work cannot be under estimated. It will be of
benefit to various segments of the economy. To individual it will contribute to
their knowledge on the financing of agriculture by commercial banks.
To the business commodity, this is to
provide them with the needed research data to assist them to invest in
agricultural business.
To the government, it is to help in
policy formulation in relation to commercial banks and agricultural financing.
Again,
more significant about this study is the benefit the students will derive from
it. It will enable other researchers to make use of the finding obtained from
the research work to increase their knowledge and further their research.
- SCOPE
AND LIMITATION OF THE STUDY
This
research work covers all significant contribution of
Commercial
banks towards agricultural development, using union bank of Nigeria plc Ilorin
as the case study. The study examines the annual reports and statement of
accounts wit other journals of the bank. One of the major limitations of this
study is the collection of all relevant information from the bank. The coast of
conducting the research is another limitation. There is also limited time in
carrying out the research. However, effects will be made to provide current
information concerning the study.
1.5 RESEARCH METHODOLOGY
In this sources work both primary and
secondary sources of data is used in collecting information needed for the
study. The primary sources of data consist of Oral interview with management
and staff of Ilorin bank of Nigeria plc, Ilorin and its customers.
Questionnaire is administered among the management, staff and customers of the
bank other essential information is gathered from secondary sources include
journals, billions textbook and magazines.
Data obtains is analyzed by using
simple statistical model such as percentages table.
1.6 PLAN OF THE STUDY
The study is
divided into five chapters, chapter one contains a brief background of the
study statement of the problem, significance of the study, objectives of the
study, scope and limitation of the study.
Chapter
two contains a review of related literature.
Chapter three contains research
methodology which includes method f data collection and method of data
analysis.
Chapter four contains the presentation
of the analysis of data.
Chapter five focused on the summary,
conclusion and recommendation arising from the study.
- DEFINITION
OF TERMS
To
gain a through understanding of this study, an attempt has made to define the
following terminologies as they used in this research work.
AGRICULTURE: This
is used in its common parlance which
includes
production research and training in the fields of crops for story fishing and
livestock.
FARMERS:
Have been used in generic séance to cover the whole spectrum of agricultural
production.
GROSS DOMESTIC
PRODUCT {GAP}: This is an instrument which the
commercial banks holds as a security against loans obtained in the event of
default as a result of evasion or death.
ADVANCE:
These are usually granted to the banks customer either by overdraft on current
account or by loans upon a separate account.
OVERDRAFT: This
is an arrangement by which an account
holder is allowed access to fund in excess of his balance subject to stipulates
limit and duration, is the common form of short-term credit.
CREDIT: This
is sued to refer property {among} handed to a customer by a banker with the
promise to repay the sum given at a future date.
INTEREST:
This refers to the money which is paid for a loans or the use of money. This is
usually expressed as a percentage of the total loan.
SAP:
Central Adjustment Accidentals
CBN:
Central Bank of Nigeria
BIOA:
Bangui International Pour Enrique Accidental
NACB:
Nigeria Agricultural and Cooperative Bank
1.8 THE
ROLE OF COMMERCIAL BANKS IN AGRICULTURAL DEVELOPMENT
The
commercial banks help the agricultural sector in developing countries in a
number of ways.
They provide loans to traders in agricultural
commodities. They open network branches in rural areas to provide agricultural
credit.
They provide finance directly to
agriculturists for the marketing of their produce, for the modernization and
mechanization of their farms for providing irrigation facilities for developing
land e.t.c. They also provide financial assistance for animals husbandry, dairy
farming, sheep breeding, poultry farming and horticulture. The small and
marginal farmers landless agricultural workers artisans and petty shopkeepers
in rural areas are provided financial assistance through their regional rural
banks. Those regional rural bank operate under as commercial bank.
All
these roles have contributed greatly to the development of agricultural sector
of the economy essential. There are three base categories of farmers and these
include:
i. Small
scale: Loan facilities are processed for approval without tangible security
people in this category mainly workers who use agriculture as a secondary
business. Hence, their employer stand as security for their in the event of
default repayment {RBRDAs} as well as other measure both federal and state
level to enhance agricultural productivity and output. The governments have
given such priority to agricultural production because of their realization of
the contribution of a highly developed agricultural sector could make the
development of Nigerian economy. First and increase in export crop production
should supplement our foreign exchange earning. Successful attempts to bring
agriculture to its pre oil boom glory strengthen our economy and reduce the
risk of over dependence on crude oil alone. In addition, it should always be
boom in mind that storage in food supply could and it has been experienced
elsewhere result in civil unrest and political crisis. It is unfortunately that
despite all efforts of the government to boost food production in Nigeria, the
acute shortage of food supply still persists and this crisis situation is
prevailing in the economy.
AGRICULTURAL
DEVELOPMENT
In
order to tackle some of the problem confronting the agricultural sector, the
government put in place certain policies and programmed with a view of solving
them. The genesis of those policies and programmed could be traced back to
1950s and 1960s when various credit institution and programmed were established
to support and finance agricultural development. Most important of these
programmes include operation feed the nation {OFN} this was started in 1976 by military regime as a mass
enlightened and mobilization campaign to raise agricultural output mainly
through expansion of areas under cultivation.
&nb
