ABSTRACT

Effective production requires that the various resource inputs — land, capital labour and entrepreneurship be present in their right proportions. The scarcity of resources makes it a necessity to combine these factors effectively to maximize output, reduce cost and envisage high returns. Capital always poses a problem to most farmers especially the peasants. Huge capital is needed for large scale farming to purchase machines and equipment, seeds and fertilizers, etc. At times, it is not possible for individual farmers to raise such capital. Hence the awareness of this problem, necessitated the need for both governmental and non-governmental bodies to provide means to help farmers procure funds in form of credits and loans to embark on large scale farming. The task of revamping Nigeria's agriculture can be achieved through the combined effects of improved techniques, resource availability, management and marketing expertise in agricultural business as well as the availability of capital capable of creating economic opportunities for farmers. The Nigerian farmer needs credit essentially for their farm production. The vicious cycle of poverty manifested in low productivity and low farm income leaves the farmer with virtually no savings to invest in the capital required for the transformation of their production technology. Broadly classified, financial institutions could be formal or informal (traditional). For the fact that farmers lack access to institutional sources of credits have compelled them, in the past to adoption will, to a large extent be dependent on farmers' ability to finance the innovations. Although a lot of constraints to achieving greater productivity exist, adequate flow of funds into the agricultural sector has been identified as a critical factor in accelerating incremental production.

TABLE OF CONTENTS

PAGE

Title Page

Approval Page (Certificate) ii

Dedication ii

Abstract iv

Table of Contents vii

List of Tables ix

CHAPTER ONE

1.0 INTRODUCTION I

1 .1 Background Information

1 .2 Problem Statement 3

1 .3 Objectives of the Study 4

1 .4 Statement of I lypothesis 5

1 .5 Significance of the Study 5

1.6 Limitations of the Study 'ii

CHAPTER TWO

2.0 LITERATURE REVIEW 7

2.1 Agricultural and Economic Development in Nigeria 7

2.2 Capital Mobilization Through Savings 9

2.3 The Role of the Nigerian Government in Rural

Financial Intennediation 1 0

2.4 The Challenges Facing Rural Financial

Institutions in Financing Agriculture 1 2

2.5 The Effects of Credit and Financial Policies on

Rural Banking 1 5

2.6 The Problems of Financing Agriculture in Nigeria 16

2.7 Socio-Economic Characteristics Affecting

Patronage of Financial Instituüons 19

2.8 The Role of Agricultural Credit Guarantee

Scheme Fuvd (ACGSF) 20

CHAPTER THREE

3.0 METHODOLOGY 23

3.1 Area of Study 23

3.2 Ultra Collection and Sampling Procedures 24

3.3 Data Requirement 2 1

3.4 Analytical Technique 24

CHAPTER FOUR

4.0 RESULTS AND DISCUSSION 27

4 1 Socio-Economic Characteristics of Sampled Farmers 27

4.2 Correlation Analysis 36

4.3 Attitude of Rural Farmers Towards Banking

4.4 Constraints To Farmers' Patronage of

Financial Institutions 42

CHAPTER FIVE

5.0 SUMMARY, RECOMMENDATION AND

CONCLUSION 48

5.1 Summary 4

5.2 Recommendations 48

5.3 Conclusion 49

References 50

Appendix 54