ABSTRACT
The object of this study is to determine the
vital role played by commercial banks in Agricultural financing in Enugu State
which has been a major handicap to agricultural development today.
The study arose from the fact the guest to
achieve self sufficiency in food production which is the greatest and highest
priority area facing most of the world’s people today. Apart from the role of
oil economy today, agriculture still remains the major stay of the Nigeria
Economy as it provides majority of the populace with employment, income and
food.
As a business venture, it cannot be executed
extensively unless funds is available for replacement and capital equipment
procurement to enhance a quicker, clearer and more comprehensive of the
important of this study. This work is divided into three chapters. Chapter one
deals with statement of problem, brief history of Afribank PLC purpose and
significant of the study scope and limitation of the study and definition of
terms
Chapter two deals with review of related
literature which includes policy and means to boost agricultural scheme, types
of loan factors and risk in agricultural financing and costly constraints to
agricultural financing
Chapter three deals with findings
recommendation and conclusion.
PROPOSAL
The role of commercial banks in agricultural
financing in Enugu state.
The commercial banks had played sufficient
roles to the agricultural financing in Enugu state. The role played by the
commercial bank to the agricultural financing had been the major development of
agriculture in Enugu state up till today.
The role of commercial bank to the
agriculture has resulted to adequate food production, employment and the most
economic development in no doubt had made agriculture one of the pillars of the
Nigerians living.
The purpose of the study is to determine and
detects those roles played by the commercial banks to the agricultural
financing in Enugu state. And how it can enhances agricultural development of
Enugu state and also ways of encouraging those roles for the betterments of
Nigeria and Enugu state in particular.
However, without the role of the commercial banks,
agriculture will not be at this level due to lack of funds and some other
factors handled by the commercial banks.
TABLE OF CONTENT
Title page
Certification
Dedication
Acknowledgement
Proposal
Table of contents
Abstract
CHAPTER ONE
1.1
Introduction
1.2
Statement of the problems
1.3
Brief history of Afribank plc
1.4
Purpose of the study
1.5
Significance/importance of the study
1.6
Scope and limitation of the study
1.7
Definition of terms
CHAPTER TWO
2.0
LITERATURE REVIEW
2.1
Introduction
2.2
Policy and means to boost agricultural finance
2.3
Agricultural credit guarantee scheme
2.4
Types of loan available in Afribank plc
2.5
Agric insurance scheme
2.6
Factors and risk in agric/ financing
2.7
Constraints
CHAPTER THREE
3.1
Recommendation
3.2
Conclusion
3.3
References
3.4
Bibliography
3.5
Appendix
CHAPTER ONE
INTRODUCTION
Agriculture can be define as the science or
practice of farming i.e. cultivation and integration of live-stocks and
production of raw materials for industries. It is well known that farming is
the oldest occupation in the world and indeed it remains till date, one in
which the largest number of people are engage. The vast majority of the
population of the world, depends on its more complex since, agriculture is
basically concerned with the production of food which is basic necessity of
life.
The problems of capital scarcity in
agricultural production in most developing nations are generally giving cause
for involvement. As of the huge capital elopement, subsistent agriculture now
cultivate crops only for their selves and their immediate families, hence the need
for commercial bank to participate actively in agricultural financing materials
for key industries and a major foreign exchanged earners has further added to
its prominence among all human occupation. As a business, it cannot be carried
out intensively unless funds are available for maintenance, replacement and
capital equipment procurement and other expenses.
THREE TYPES OF CREDIT ARE USUALLY REQUIRED.
a.
Short Term Credit to financial yearly planting operations, seeds,
fertilizers and farm expenses until the crop is sold. The amounts involved here
might not be large, but inadequate of this type of credit is most predominantly
felt by small farmers who have little or no savings upon in which to hang on.
b.
Medium Term Loan (longer than one planting year but less than three
year). This is need for acquisition a breeding stock and cheap with relatively
short little.
c.
Long Term Credit necessary to acquire major machines and equipment
repairs and maintenance of farm lands building, storage facilities etc. the
role of credit finance in promoting development in the country is well known in
recent times, government has devoted lot of financial resources to the
agricultural sector in order to boost food production through it’s lending policies
to commercial banks as well as the establishment of certain agricultural
schemes.
1.2
STATEMENT OF THE PROBLEMS
In this age of expanded business activities
around the world especially in Nigeria Agriculture is more than ever needs
financial assistance in form of bank loans to meet the increasing need for food
production. Obtaining such loans however has not be easy for farmers. Largely
as a result of collaterals security, lack of
proper accounting records and management among other limiting factors.
Inspite of the importance of oil in the
economy today, agriculture still remains the main stay of the Nigeria Economy
as it provides the greatest avenue for employment, income of food for the
Nigerian populace. It’s internatic position as a source of raw materials for
agricultural credit.
Agricultural credit therefore is a necessary
ingredient in agricultural practices and in farm productivity especially if
supplied on sufficient quantity and efficiently used. However, credit is only
one of the “essentials for expansion and modernization, for credit parse, is
not entirely inevitable, but a necessary key to a more prosperous future.
The commercial banks on their part has been
placed what might be an optimal level in banking lending. The customers who has
over the years been playing the expectations role, does not wish to continue
that way and thus assumed an advisory role in the light of the above that thus
study undertaken to provide some solutions to the numerous problems associated
with commercial banks loans especially to the agricultural sector.
1.3
BRIEF HISTORY OF AFRIBANK PLC
Afribank Plc acquired license to operate as a
financial institution on October 20, 1959. and opened its first branch at Kano
city on January 4, 1960, she has at that time known as Banque international
four L’ Afrique Accidentally (BIAO). The origin of (BIAO) dates back to around
1853 when the bank has first established in Senegal. Later this was changed to
Banque Pail Afrique accidental (BIAO). The word international was added later
when the banks ownership include the National City bank.
BIAO was one of the first banks to set up
shop in West Africa at a point, the banks activities in the areas were
prevailing that she was given the
authority to issue current note (A central bank duty) in the French
speaking west Africa countries Afribank Plc then IBWA was established as a
subsidiary of (BIOA)
In compliance with order of the federal
government , the bank headquarters was in 1960 set up at 9th broad street,
Lagos it has remained there till day. The establishment of Afribank Plc then
IBADAN, concluded with the emergence of the countries oil industry. The bank
soon developed links with some oil companies and is order to serve their need
more promptly, the bank set up two more branches in Port Harcourt and Aba First
before the out break of the civil war in 1967. with the promulgation of the
Nigerian companies decree in 1968, it became expedient for all farms operating
in Nigeria to be incorporation as Nigerian companies. On May 30, 1969 (BIAO)
was incorporated in the country as a limited liability company under the
national international bank for west Africa (IBWA) the English equipment of
BIAO). In 1997, the bank got her first Nigeria Chairman, in the person of
Alhaji T. Galadima on the same year, BIAO herself experienced changes in her
own quity structure. The union bank of Switzerland bought over 20 percent of
the 49 percent of the BIAO equity capital held at that time by citizen bank U.A
further 20 percent of the portion was taken up by Banko Brasil, while the
remaining percent was brought by the compigne international Africarne de Banque
holding S.A. Luse-emboury
On account by the indigenization, the federal
military administration which was in place at that time in Nigeria, in the year
1976 acquired 60 percent of equity structure of Afribank plc and some other
banks.
1.4
PURPOSE OF THE STUDY
It is a living concept among the people today
that low returns to agriculture is entirely as a result of lack of finance. It
is against this background supported by the statement of problem that the
researcher wishes to identify and analyze other issues raised along side
finance (capital) as could be seen capital is the life wire of any ventures
whose capital base is shaky could be said to be in serious jeopardy.
It is this singular factor that is lacking
therefore other numerous problems like labor turned over, adequate training,
like learning of new agric skills and higher marginal production per worker
will automatically develop. It