AN APPRAISAL OF THE ROLE OF BANKS IN FINANCING AGRICULTURAL CO-OPERATIVE SOCIETY IN ENUGU-STATE. (A CASE STUDY OF THE N.A.C.R.D.B. LTD)
TABLE OF CONTENT
CHAPTER ONE
Introduction 1
CHAPTER TWO
Review Of Related Literature 10
Co-operative society 16
CHAPTER THREE
Research Design and Methodology 23
Questionnaires 26
CHAPTER FOUR
Findings, Recommendation and Conclusion 45
Interview Questions 55
Bibliography and References 59
LIST OF TABLES
TABLE 2: Number of societies with their membership and activities (question 1 &2)
TABLE 3: Sources of finance and percentages
TABLE 4: Financial assistance from the government and their percentages (Question 6&7)
TABLE 5: Loans from N.A.C.R.D.B. LIMITED Percentages (question 8)
TABLE 6 : Response for and against N.A.C.R.D.B. LTD. Loans scheme through C.F.A. Ltd (question 16)
TABLE 7: Response that their loan helped co-operative societies (question 5) for bank officials
TABLE 8: Testing of hypothesis using chi-square formula on inadequate finance.
TABLE 9: Farmers multi-purpose co-operative society if fully equipped could be an efficient means of increasing agricultural production in Enugu-State (Nigeria).
CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
Agriculture is a very important sector in Nigeria economy. Apart from contributing substantially to the gross domestic product and being the most greatest employer of labour of which over 75% of the population are fully involved, it is an important sources of: Food supply, Raw materials, Government revenue, and foreign exchange earner. The growth of agricultural production declined drastically in that, it was becoming increasingly difficult to feed the teaming population from the emergence of oil (petroleum) as a major source of foreign exchange earner in the early seventies, hence the evolution of the operation feed the Nation Programme
(O.F.N. P).
With the high dependence on oil, agriculture becomes a neglected sector until the early eighties when hunger was seriously felt as a result of sharp decline in food production.
To worsen the situation over the high dependence on oil, the price of oil dropped in the World Market. It has then and thereafter that Nigerians seemed to realize that revival of the agricultural sector is the only solution t the Nation’s problems. As a result of this, the government initiated progrrammes to assist in the development of agricultural with a view t attaining self sufficiency in food production and decreasing the high reliance on oil. Such prgrammes included the operation feed the Nation (O.F.N), the Green Revolution and the boast given t the Nigerian Export Promotion Council (N.E.P.C).
Small-scale farmers dominated Nigerian agriculture and accounted for abut 50%. The Nigerian small-scale farmers were often characterized by a number of features including:
It has been established that the bulk of food is produced by small-scale farmers. Although individually, the small-scale farmers provide small quantities of food, it has been shown that in aggregation, their combined outputs are tremendous.
Therefore, the role of farmers in this period of food crisis in the country requires a lot of emphasis of which it constitutes a potential force in the envisaged massive production in the development of agriculture.
Various attempts have been made by past federal administrator and even the co-operative movement to this effect. It takes only the (N.A.C.R.D.B.Ltd) that has to interest of agricultural co-operatives at heart to handle such a risky venture. to this end therefore, it has established through the central government.
Farmers have been called upon to join a farmer co-operative organizations in order t make the objectives of the programme a reality.
In 1977, the federal government and the central bank established the agricultural credit guarantee scheme ( A.C.G.S.) which has designed to stimulate agricultural production, reduce the problem of inadequate security and attract development banks.
Since the inception of a modern co-operative movement in Enugu-State, as much as 2,000 co-operative societies have been formed. The co-operative societies have embarked on various types of businesses including mainly those in agriculture, marketing, thrift and credit etc.
In all these co-operative, huge capital outlay is involved. Unforfunately, a lot of the members of these co-operative do not have much capital to invest more especially the agricultural co-operative because of the poor financial background of most of the members. It requires money annually for disbursement to members of their societies for their individual farming.
Any bank therefore, investing in agricultural projects with the aim of improving the standard of living of peasant familer’s should have in mind that it is unto a risky venture. This is due to the degree of uncertainty involved in agricultural production. Where the self interest of the farmers is not there, the bank tends to encounter a lot of problems.
Inadequate capital is a major problems hindering agricultural production in Enugu State. Its in most cases directly affect its size of operations with limited funds, they produce at marginal and sub marginal levels. As a result of this, the amount of income generated is very limited and the problem of default in repayment f loans occurs.
Delay in loan hinders production. Due t fear of risk, there is normally late approval and disablement of loans. Any good farmer should start farming on time, but at times, the loan come very late, thereby depriving then the benefits of bulk marketing and better prices.
As most of those co-operative are illiterates, they need to be counselled by experts. The complicated nature of these agricultural loan to farms makes it difficult for the farmers to understand the term involved.
With high interest rate, considering the poor financial standing of these farmers, agricultural production in Nigeria cannot attain it’s optimum level of output.
The Nigerian Agricultural, co-operative and Rural Development Bank Ltd, was established t solve the problem of finance to farmer’s. it has the objectives f prompting agricultural, rural development and quality of life.
The general purpose of this work is t analyse the role of Bank with special reference to the N.A.C.R.D.B. Ltd. In financing agricultural co-operative in Enugu State and t make possible recommendation on how best it would improve its performance.
The specific objectives are:
This study is conducted in order to appraise the role of banks in financing of agricultural co-operative societies in Enugu-State.
The banks and policy makers could be well-informed f the appraisal of it's’roles or practice that need modification in order to maintain reasonably high standard of which when the modifications are properly carried out, the improved finance which in the final analysis will increase the level of productivity, income welfare, capital accumulation and formation, to mention bet a few.
Reasoning from this development banks and financial institutions will therefore take a bearing t the N.A.C.R.D.B. Ltd. Tea nation as a whole will benefits as this study can be equally used where applicable to improve agricultural output in other parts f the country.
From the above points, therefore, the nation will witness eradication of hunger through increased food production. And also other benefits derived from agriculture as a source of raw-materials, employment and revenue.
The area of the study of this research is Enugu State of Nigeria, since the emphasizing bank is partly owned by the State government or central government.
The research is to determine the role f banks wit emphasis on the N.A.C.R.D.B Ltd. In financing of agricultural co-operative in Enugu State. The research will cover in-depth study on the operations of the N.A.C.R..D.B Ltd with a view to finding out t what extent this bank is helping various farmer’s.
Also on insight to produce this work, the research faced several handicaps which includes: inadequate for data, non-co-operative attitude of some officials visited resulting in their failure to side close some vital information about their societies and some parts of the society’s books of accounts etc.
It was not easy to contact some of the officials of N.A.C.R.D.B. Ltd and co-operative financing Agency Ltd, whose experiences would have helped the researchers in ensuring a broad based approach.
Even when contacted, they failed to disclose some vital information due to the principle of oaths of securely holding Bankers and Customers relationship as claimed by them.
Finance was a problem which nearly hindered the completion of this work. The financial constraints limited my travelling between the branches of the banks and some other local governments within my coverage. So I had to act on the materials within my reach.
N.A.C.R.D.B. : Nigerian Agricultural co-operative and Rural Development Bank Limited.
C.F.A. : Co-operative Financing Agency Ltd.
A.C.G.S : Agricultural Credit Guarantee Scheme
N.E.P.C. Nigerian Export Promotions Council
G.D.P. Gross Domestic Product
G.R.P Green Revolution Programme
O.F.N.P. Operation feed the Nation Programme.
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