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THE IMPACT OF FINANCIAL INSTITUTION ON AGRICULTURAL PRODUCTION IN ONDO STATE.
TABLE OF CONTENT
TITLE PAGE
CERTIFICATION
DEDICATION ACKNOWLEDGEMENT
TABLE OF CONTENTS
ABSTRACT
CHAPTER ONE
INTRODUCTION
Background of the Study
Statement of the
Problem
Problem
Purpose and objective
of the study
of the study
Research questions
Research hypothesis
Scope or limitation of
the study
the study
Significance of the
study
study
Definition of basic
terms
terms
CHAPTER TWO
Review of literature
Concept of credit
Role of credit in small
scale farming
scale farming
The demand for and supply of
credit in the agricultural sector
credit in the agricultural sector
The role of commercial bank
in agricultural financing
in agricultural financing
The impact of the merchant
bank on agriculture
bank on agriculture
The role of Nigerian
agricultural and co – operative bank limited (NACRBD) on agricultural
production
agricultural and co – operative bank limited (NACRBD) on agricultural
production
Agricultural credit
guarantee scheme fund (ACGSF)
guarantee scheme fund (ACGSF)
Nigeria agricultural
insurance company (NAIC) and its role on agriculture
insurance company (NAIC) and its role on agriculture
Role of other Non -formal
financial institution like friends, relative, private money lender on
agricultural financing
financial institution like friends, relative, private money lender on
agricultural financing
CHAPTER THREE
INTRODUCTION
Research methodology
Population
Samples and sampling
procedure
procedure
Instrument for data
collection
collection
Method of data collection
Method of data analysis
chapter four
Result and discussion
Social Economic profile of
the farmers
the farmers
Analysis of demand for
credit
credit
Problems of respondents in
obtaining credits
obtaining credits
Suggested solution for
problem of credit utilization
problem of credit utilization
CHAPTER FIVE
Summary, conclusion and
recommendation
recommendation
Summary
Conclusion
Recommendation
Reference
Appendix
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ABSTRACT
The vicious circle of poverty starts from the premise that
in less developed countries outputs are low due to deficiency of capital,
market imperfection, and economic backwardness and under development. The aim
of this study is to break the vicious circle of poverty and ensure that farmers
in Okitipupa -local government have access in obtaining loan from financial
institutions. The methodology used in this study was primary data and the
primary data was collected using well structure questionnaire. The local
Government Area has a large population most of which are predominantly engage
in agriculture. Some farmers operate based on the Surge scale but majority are
small scales. From this research work, one can say that the major problems
facing the farmer is the utilization of credit to increase their production is
high interest rate, inadequate loan provided, lack of collateral required etc.
it is therefore evident that the reduction in the interest rate, timely provision
of credit, subsidization of farms inputs, provision of more formal financial
institution in rural area will go a long way in solving the problem of vicious
circle of poverty among traditional farmers in Okitipupa local Government Area of Ondo State.
in less developed countries outputs are low due to deficiency of capital,
market imperfection, and economic backwardness and under development. The aim
of this study is to break the vicious circle of poverty and ensure that farmers
in Okitipupa -local government have access in obtaining loan from financial
institutions. The methodology used in this study was primary data and the
primary data was collected using well structure questionnaire. The local
Government Area has a large population most of which are predominantly engage
in agriculture. Some farmers operate based on the Surge scale but majority are
small scales. From this research work, one can say that the major problems
facing the farmer is the utilization of credit to increase their production is
high interest rate, inadequate loan provided, lack of collateral required etc.
it is therefore evident that the reduction in the interest rate, timely provision
of credit, subsidization of farms inputs, provision of more formal financial
institution in rural area will go a long way in solving the problem of vicious
circle of poverty among traditional farmers in Okitipupa local Government Area of Ondo State.
CHAPTER
ONE
ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
BACKGROUND OF THE STUDY
The
vicious circle of poverty start from the premise that in the less-developed
countries’ out are low due to deficiency of capital, market, imperfection,
economic back and under development .low output we need to low real income. If income
is low, consumption and saving will be low. Low saving means low capital
formation and low investment. Poverty and under development of the economy are
synonymous.
vicious circle of poverty start from the premise that in the less-developed
countries’ out are low due to deficiency of capital, market, imperfection,
economic back and under development .low output we need to low real income. If income
is low, consumption and saving will be low. Low saving means low capital
formation and low investment. Poverty and under development of the economy are
synonymous.
A country is poor because it is
under –developed but at the same times a country is under developed and poor
because it is does not have resources for promoting development. (Fapophinda
Olarewaju, 2001)
under –developed but at the same times a country is under developed and poor
because it is does not have resources for promoting development. (Fapophinda
Olarewaju, 2001)
To
achieve the above fact, government of Nigeria and many under countries of west
Africa must recognized the roles which credit can play in agricultural production
and ton establish a number of financial institutions and special agencies to
provide agricultural credit to farmers. a part from formal financial institution such as merchant,
achieve the above fact, government of Nigeria and many under countries of west
Africa must recognized the roles which credit can play in agricultural production
and ton establish a number of financial institutions and special agencies to
provide agricultural credit to farmers. a part from formal financial institution such as merchant,
traders, friend and relatives have help in no
small measure to finance have helped agricultural production farmer are poor
because they cultivate on very small area of land from which their output is
very low and hence sell only a very small amount which is ture helps in
expanding the farm or acquiring new technology . Agricultural cerdit to small
production farmers can help in breaking the vicious circle of poultry.
small measure to finance have helped agricultural production farmer are poor
because they cultivate on very small area of land from which their output is
very low and hence sell only a very small amount which is ture helps in
expanding the farm or acquiring new technology . Agricultural cerdit to small
production farmers can help in breaking the vicious circle of poultry.
It
must be noted that agricultural credit is very is short supply despite the
various government measures to get more credit directed to the sector. Farmers
in general and small holder in particular are not in favourable position to
obtain loans from credit institution is reluctant to advance credit to farmers
because of the fear of indebtedness, especially since farmer cannot always
prove acceptable collateral security.
must be noted that agricultural credit is very is short supply despite the
various government measures to get more credit directed to the sector. Farmers
in general and small holder in particular are not in favourable position to
obtain loans from credit institution is reluctant to advance credit to farmers
because of the fear of indebtedness, especially since farmer cannot always
prove acceptable collateral security.
1.2 STATEMENT OF THE PROBLEM
Nigeria
is a nation of small scale farmers This because when it is realized that small
production farmers accounted for about 95%
of the countries population earn their living from this farming system
(olayemi,1980).he also classified small production farmers as those having the
size of farm ringing from 0.10-5.99 heatres.
is a nation of small scale farmers This because when it is realized that small
production farmers accounted for about 95%
of the countries population earn their living from this farming system
(olayemi,1980).he also classified small production farmers as those having the
size of farm ringing from 0.10-5.99 heatres.
It
could be noted that small-scale farmers are efficient in the allocation of
resources within their disposal but lack proper purchasing power .Therefore,
increase in credit available to agricultural production in a condition for enhancing
greater productivity of both small-scale and large scale farmers.
could be noted that small-scale farmers are efficient in the allocation of
resources within their disposal but lack proper purchasing power .Therefore,
increase in credit available to agricultural production in a condition for enhancing
greater productivity of both small-scale and large scale farmers.
As
part of government policies, the CBN sometimes mandated the other banks to give
substantial percentage of their loans to the farmers likewise, the informal
financial institutions also give loans to the needy farmers to boot their
productions both formal and informal as channel of funds from lenders to
borrowers on the productivity of farmers in Okitipupa local Government Area of
Ondo state.
part of government policies, the CBN sometimes mandated the other banks to give
substantial percentage of their loans to the farmers likewise, the informal
financial institutions also give loans to the needy farmers to boot their
productions both formal and informal as channel of funds from lenders to
borrowers on the productivity of farmers in Okitipupa local Government Area of
Ondo state.
1.3 OBJECTIVES OF THE STUDY
The
general objective of the study is to examine the impact of financial
institution on agricultural production in Okitipupa local government area. Of
Ondo state .while the specific objectives include the following:
general objective of the study is to examine the impact of financial
institution on agricultural production in Okitipupa local government area. Of
Ondo state .while the specific objectives include the following:
1. To indentify the major sources
of credits to the farmers in the study area;
of credits to the farmers in the study area;
2. To indentify the credit demand by farmers in the study area
3. To determine the influences of credit on
productivity of farmers
productivity of farmers
4.To determine the effect of credit utilization on
the farmers output .
the farmers output .
5. To give recommendations on ways of increasing the
farmers productivity.
farmers productivity.
1.4 RESEARCH QUESTIONS
The research questions seek to ask the following
question:
question:
a.
What is the level of education of
farmers?
What is the level of education of
farmers?
b.
What
is the minimum amount of loan that that can be granted by financial institution?
What
is the minimum amount of loan that that can be granted by financial institution?
c.
What are the experiences of the farmer?
What are the experiences of the farmer?
d.
Do all farmer access to federal
government yearly agricultural loans?
Do all farmer access to federal
government yearly agricultural loans?
e.
How big as the size of the farm land?
How big as the size of the farm land?
f.
Are you a full time farmer or part .time
farmers
Are you a full time farmer or part .time
farmers
1.5
RESEACRH HYPOTHESIS
RESEACRH HYPOTHESIS
In
the process of carrying out this research, three null hypothesis are to be
tested at p=0.05 level of significant.
the process of carrying out this research, three null hypothesis are to be
tested at p=0.05 level of significant.
Hi. l There is a significant relationship between
the level of productivity of the farmers and availability of the credit facilities to the farmers in Okitipupa
local government areas of Ondo state
the level of productivity of the farmers and availability of the credit facilities to the farmers in Okitipupa
local government areas of Ondo state
Hi. 2 The
informal financial institution has significant Impact on the productivity of
the farmers in Okitipupa local government area in Ondo state
informal financial institution has significant Impact on the productivity of
the farmers in Okitipupa local government area in Ondo state
1.6 SIGNIFICANCE
OF THE STUDY
OF THE STUDY
The
study is of great importance ,considering the place of agriculture in an
agrarian country like Nigeria. It was discovered that very many of farmers in Okitipupa
local government area practicing subsistence agriculture. The level of poverty in the area prompts
this.
study is of great importance ,considering the place of agriculture in an
agrarian country like Nigeria. It was discovered that very many of farmers in Okitipupa
local government area practicing subsistence agriculture. The level of poverty in the area prompts
this.
It
is strongly believed that this research work will bring solutions to the
problem of agricultural production in Okitipupa local government. The most
significant of this study is that, it will make more credit to be available to
small scale farmers, thereby bring an end to inadequate credit facilities the
available credit facilities will bring about increased income so generated
would provide means for them to other necessities of life, which they cannot
produce for themselves by the method, the standard of living of the peasants, will
also increase.
is strongly believed that this research work will bring solutions to the
problem of agricultural production in Okitipupa local government. The most
significant of this study is that, it will make more credit to be available to
small scale farmers, thereby bring an end to inadequate credit facilities the
available credit facilities will bring about increased income so generated
would provide means for them to other necessities of life, which they cannot
produce for themselves by the method, the standard of living of the peasants, will
also increase.
The
economic aspect of importance of the study can be looked at in capacity to
reduce unemployment and other unemployment. Also will be an increase in gross
domestic production (GDP) since a large proportion on the population depends on
agriculture. Also, the study can bring increase in the production of export
crops. Capable for ensuring enough foreign exchange indeed, this research work
is of great value because of it numerous usefulness to the farmers in Okitipupa
local government area of Ondo state.
economic aspect of importance of the study can be looked at in capacity to
reduce unemployment and other unemployment. Also will be an increase in gross
domestic production (GDP) since a large proportion on the population depends on
agriculture. Also, the study can bring increase in the production of export
crops. Capable for ensuring enough foreign exchange indeed, this research work
is of great value because of it numerous usefulness to the farmers in Okitipupa
local government area of Ondo state.
1.7
DEFINATION OF BASIC TERMS
DEFINATION OF BASIC TERMS
Financial
institution: This is institution which serves the
purpose of channeling fund from deposits to borrowers
institution: This is institution which serves the
purpose of channeling fund from deposits to borrowers
They hold money balance of or
borrow from individuals and other institution in order to make loan or
investment.
borrow from individuals and other institution in order to make loan or
investment.
Agricultural
credit: the refer to the process of obtaining controls
over the use of money, good and services in the present by farmers, in exchange
for a promise to payback at future time.
credit: the refer to the process of obtaining controls
over the use of money, good and services in the present by farmers, in exchange
for a promise to payback at future time.
Agricultural
productivity: it refer to the rate at which the
farmer produce farm product and the amount produced compare with how much time,
work, inputs, and money that is needed to produce them.
productivity: it refer to the rate at which the
farmer produce farm product and the amount produced compare with how much time,
work, inputs, and money that is needed to produce them.
Demand
for agricultural credit: this implies the rate at which
farmer seek to obtain loan or acquire credit. It could be potential or
effective demand for credit potential means those that need credits while
effective demand refers to the actual people that really obtained credit.
for agricultural credit: this implies the rate at which
farmer seek to obtain loan or acquire credit. It could be potential or
effective demand for credit potential means those that need credits while
effective demand refers to the actual people that really obtained credit.
Supply
of agricultural credit: This implies the various sources
from which credit could be obtained, it could be organized sectors.
of agricultural credit: This implies the various sources
from which credit could be obtained, it could be organized sectors.
SOURCES:
Field survey, 2016.
Field survey, 2016.
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