SMALL-SCALE AGRICULTURAL FINANCING IN NIGERIA
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).
Description
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: