SMALL-SCALE AGRICULTURAL FINANCING IN NIGERIA

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Date
1998-11
Authors
KANTIOK, BENEDICT ZACHARIAH
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Abstract
As in most developing countries, agriculture occupies a very important place in the socio-economic development of Nigeria, making a significant Contribution to the Gross Domestic Product (GDP). Agriculture and its related activities will continue to be the mainstay of Nigeria's economy for a long time to come. However, with the discovery of oil in the 1970s, the agricultural sector suffered a severe neglect, resulting in the decline of agricultural production. The declining contribution of agriculture to the national economy has made the various governments in power, both military and civilian, to formulate policies aimed at increasing the contribution of agriculture to the GDP. Provision of agricultural credit was made one of the important components of government strategy. This could be seen in the establishment of the Nigerian Agricultural and Co-operative Bank (NACB) in 1973, the Agricultural Credit Guarantee Scheme in 1977, the compulsion of commercial Banks to provide at least 10 percent of their total tendings to agriculture and the establishment of agricultural financing agencies by some states all aimed at improving the supply of agricultural credit to farmers. All the above credit institutions were established in recognition of the fact that the bulk of the Nigerian farmers (about 90 percent) who are expected to reverse the declining trend of agricultural production are the small-scale farmers who lack the necessary capital to increase their productivity. They were therefore meant to cater for this category of farmers. These laudable programmes have, however, not achieved the desired objective of providing adequate credit facilities to the small-scale farmers. This is mainly due to problems encountered by the credit institutions in their attempt to extend credit to the small-scale farmers on the one hand, and the problems encountered by the small-scale farmers in their attempt to obtain credit from the credit institutions on the other hand. There are divergent opinions among scholars as to who is to blame for the problems of small-scale agricultural financing in Nigeria. While some scholars attribute the problems to the general attitude of small-scale farmers towards agricultural credit, others blame the credit institutions, especially commercial Banks for their negative attitude towards agricultural financing. Yet some other scholars attribute the problems to both the smallscale farmers and the credit institutions. This study is therefore aimed at taking a broad view of the small-scale agricultural financing situation in Nigeria, with particular reference to the Tobacco Farmers Credit Scheme of the Nigerian Tobacco Company Plc (NTC).
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Being a Project submitted in partial fulfilment of the requirement of the Post-Graduate school for the Award of the Degree of Master of Business Administration (MBA) of the Ahmadu Bello University, Zaria, Nigeria.
Keywords
SMALL, SCALE, AGRICULTURAL, FINANCING, NIGERIA:
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