The Contribution of Banking Sector to Agricultural Growth in Nigeria a Case Study of Union Bank, Enugu Branch
CHAPTER ONE
Objectives
- Cultivate banking habit among the rural dwellers.
- Mobilize savings from rural areas for the purpose of channeling some to profitable ventures.
- Create credit by way of equity and loan for small scale industries.
- Develop agriculture and agro-allied industries in rural areas with a view to achieving the natural objective of the self sufficiency in food production.
- Reduce the uncomfortabilities of the young man and woman from the rural areas to the urban areas as regards transportations, mass production of agricultural product.
CHAPTER TWO
LITERATURE REVIEW
Finance is a key component in every business endeavor required for the establishment and running of the business. It is the life blood of any business. Funds are required for the purchase of capital equipment such as land and building, machinery and other fixed assets as well as working capital. It is worthy of note that with growth in activities in any business, comes increased financial needs and increased access to funding would facilitate expansion. The agric-business involving primarily food production, distribution, processing, marketing is not an exception. Zhang (2007) suggested that deepening financial intermediation may promote economic growth by mobilizing more investments, and lifting returns to financial resources, which raises productivity. Agricultural finance is the acquisition and use of capital in agriculture. It deals basically with the supply of and the demand for funds in the agricultural sector of the economy. USAID (2010) defined rural agricultural finance to include all types of finance available to farmers. It is a field of work in which people aim to improve access to efficient sustainable financial services for the agricultural industry, including farming and all related enterprises. It involves all financial services, including savings, transfers, insurance and loans, input supply, processing, wholesaling and marketing (Meyer, 2011). IFAD (2010) further adds that agricultural finance refers to all those financial services that focus on on-farm activities and agricultural businesses without necessarily targeting poor people. The crucial role of financing in agriculture cannot be over emphasized. The escalating world population is associated with greater pressure on food demand and the demand for agro-products that are input for further production, thus the need for use of more sophisticated methods capable of yielding greater output is essential. Finance in agriculture is as important for improved productivity as technical input can only be purchased and used by farmers if they have required fund at their disposal. In Africa, a significant proportion of the population live in the rural areas with agriculture as their major preoccupation and financial constraints in agriculture remain prevalent. Finance to the agricultural sector remains costly and inequitably distributed and this limits the ability of small-scale farmers to grow their productivity. According to Nyoro (2002), lack of working capital and low liquidity limit the farmer’s ability to purchase productivity enhancing input like seeds, fertilizers This was supported by Awudu and Huffman (2000) and Kimbaara (2005) stating that the average production efficiency levels are higher among producers who have access to formal credit. Agricultural credit therefore enhances productivity and promotes standard of living by breaking the vicious cycle of poverty among farmers.
CHAPTER THREE
RESEARCH METHODOLOGY
This chapter describes the procedures adopted in conducting the research. It include
- Research design
- Area of study
- Population of the study
- Sample and Sampling technique
- Instrument for data collection
- Validation
- Method of data collection and method of data analysis
Research Design
This study is a survey research. A survey research because it collected and analyzed data on the contribution of banking sector to agricultural growth in Nigeria particularly Union bank in Enugu state.
Area of Study
The study covered 13 (thirteen) branches of Union bank in Enugu. The Branches are;
4 (four) branches in Enugu North which include,
(a) Union Bank Ogbete
(b) 2 (two) branches garden avenue
(c) Union bank garden Avenue.
(d) 1 (one) branch in Enugu East which is located in Emene Enugu. Other branches include the branches in some rural areas such as;
(i) Nsukka (ii) Agbani (iii) Ogbede (iv) Ninth mine
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed regression analysis in the study as it is deemed more appropriate.
CHAPTER FIVE
SUMMARY CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to evaluate the contribution of banking sector to agricultural growth in Nigeria
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of banks in providing loans for agricultural purpose.
Summary
This research work focused on assessing contribution of commercial Banks in the Growth in f agriculture Nigeria. Eco bank of Nigeria was used as the sample of the study. At the beginning, a general overview of the study was clearly outlined with its objectives. The review of related literature followed. Related data were collected, tested and analyzed. Commercial banks can be seen primarily in the growth of their portfolios. Many have rapidly expanded the volume of their commitments, but however, disbursements nearly always lagged behind commitments. Commercial Banks have also tried to introduce the technique of project formulation and appraisal. The idea that investment proposals should be spelt out in considerable detail (engineering blue prints, production schedules, and financial productions) was a new one in many business communities. However, very few commercial banks have played an entrepreneurial role by promoting new enterprises. We are all aware of the various re-engineering efforts going on in the banking industry today. Even corporate organizations that are known to have been existing for years, are currently refocusing.
Conclusion
The birth of development banks in Nigeria signals a positive development towards agricultural sector. This step was applauded by many stake holders in the industry especially, the fact that the sector used to be the bed rock of national source of income. The aims and objective of this Bank was viewed as lubricating oil that propelled the wheel of economic development. The neglect on this sector had untold hardship on both internal and external activities. Importation became the other of the day while our domestic industries, which should have served as shock absorber to the economic development through its contribution to job creation and subsequent reduction on unemployment became a mere dream.
Recommendation
In view of the findings of the study, the following recommendations have been suggested Development banks must recruit, train and deploy staff of engineering, financial analysis and other professionals. commercial banks should re-examine and redefine their objectives, policies and operational strategies, seek new market niches in non-traditional activities and fight for larger market shares. Mobilization of rural savings through deposit taking: with the merger of commercial banks and agricultural banks should now mobilize savings. This will provide additional sources of funds to on lend to borrowers. Charging market determined interest rates: Over the years the NACB has been constrained by having to provide credit facilities to farmers at rates far lower than market rates. Unless the shareholders are willing to bear the cost of subsides credit to agriculture, the merged institution (NACRDB) may have no choice other than to consider the charging of prevailing market determined interest rates % if it is to remain in business.
Reference
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- Carneiro, D. (2005), Stabilization and Adjustment Policies and Programmes: Country Study of Brazil. WIDER:
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