THE ANALYSIS OF LOAN ADMINISTRATION IN FINANCIAL INSTITUTION IN THE NIGERIA ECONOMY

THE ANALYSIS OF LOAN ADMINISTRATION IN FINANCIAL INSTITUTION IN THE NIGERIA ECONOMY

ABSTRACTS

This study steps out to analyze the loan administration in the financial institution in the Nigeria economy (a case study of the Nigeria agricultural cooperatives and rural development banks (NGCRDB). The project is intended to focus on the adequacy of credit supply to the sector of the economy by NACRDB loan disbursement. The researcher attempted to find answer to the following research question. Viz to what extent has NACRDB contributed to the development of Nigeria economy through this loan administration? What is the adequacy of NACRDB sectoral allocation towards agricultural development in Nigeria? What is the influence of the interest rate on loan administration by NACRD? The researcher relied extensively on data and information-collected form the NACRDB of Enugu and Awka zone. The study is covered by the period of 2000 – 2002. The researcher also employed the percentage analysis and used table to illustrate the trend analysis carried out. To carry out this study is a directive framework. Four research questions were formulated. The four questions attracted a total of 7 questions in the questionnaire. The questionnaire is made up of three section (ABC). Section “A” deals on the general information, which was not tested while section B&C were tested. Four hypothesis were drawn and was tested using the chi – square method and formular. Questionnaire were designed, typed and distributed to the area of study, which involve both the costumers and the staff of financial institution of the study. This was to gather vital information on the topic in question. The stratified random sampling was used in the in the selection of the respondent in the financial institution (NACRDB). The reason to enable or make it easier for the researcher to get a comprehensive use of the population of the study. A total of 70 questionnaires were administered and out of this figure, 40 were returned, and 30 were unreturned. A table is used to illustrate the return of the questionnaire; percentage method was used in analyzing the research question. The outcome or the result of the research question or the hypothesis shows that loan administration in financial institution NACRDB in the Nigeria economy is very vita in the sense that it contribute to a very great extent in the growth and development of the country. However, NACRDB have to be helping farmers by giving them enough loan and advances so as to boost the agricultural sector, which is the major source of food supply in the economy. As a result, more food will be produced and the export rate will increase. After collection and analysis of data, the researcher was able to give some suggestion on how the NACRDB farmer relationship in financing could be improved. It is recommended that the federal government should continually provide the enabling environment for the NACRDB to perform by providing rural area with basic amenities and as well ensure adequate funding of the institution (NACRDB). Finally, conclusions were drawn based on the findings and recommendations. It encompasses all the area writing in the project work.

CHAPTER ONE

1.1 INTRODUCTION

Loan administration is one of the external mean of financing many sector of the economy especially the agricultural sector. This is due to the fact that the agricultural sector is the major source of the food production and supply in the country. This loan is been administered through the financial institution established by the federal government of Nigeria. It (loan administration) is been introduced so as to help rural farmers and small-scale business financially in their various businesses. This enhances and increases the agricultural productivity. Loan administration in the financial institution is also one of the elements that determine the extent of economic growth and development in the country. Financial institution in 1990”s do not properly administer their fund to the major sector of the economy which is the agricultural sector and this led to the importation of food to the Nigeria making the country so much dependent on other country for food. Thus the agricultural sector could not boast of food production due to the fact that it was not adequately financed. In Nigeria, up to 75% of its production engage in agriculture which is the major source of food supply in the country and most of them are poor and rural farmers which have limited fund to produce the input and technological required in carrying out their agricultural business. This lack of fund lead to reduction in the food supply in the country and at the same time retard economic growth and development. Therefore, agricultural sector need to be adequately funded through the use of loan administration so that the economy can boast of being independent of other countries and also can develop.

Do to the problem of lack of capital experience in the agriculture sector; especially in the rural farmers and small-scale traders, the federal government of Nigeria took a major concern on the issue of loan administration to enhance development in the country’s economy through financial institution. This led to the establishment of the Nigeria agricultural co-operatives and rural development bank (NACRDB), family economic advancement programme (FEAP), the Nigeria agricultural cooperative and rural development bank (NACRDB). This establish in January 200 but was dually confirmed by the federal executive council of Nigeria in November 200. the bank is been supervised by the federal ministry of agriculture.