PROBLEMS CONFRONTING SMALL FARM HOLDERS IN ACCESSING LOAN FACILITIES: A CASE STUDY OF IKERE LOCAL GOVERNMENT AREA

PROBLEMS CONFRONTING SMALL FARM HOLDERS IN ACCESSING LOAN FACILITIES: A CASE STUDY OF IKERE LOCAL GOVERNMENT AREA

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND TO THE STUDY

Farmers need productive resources and these resources are acquired with owned or borrowed fund. Agricultural is very important to the economy of must developing countries of the world and because of this, a supply of adequate finance is essential for national well-being. Since agriculture is the back-bone of Nigeria economy providing employment to about 70% of its population yet this important sector has suffered neglect since the oil boom days. Agriculture has totally declined since the early 1970s Nigeria export crops such as groundnut, oil palm and cocoa have suddenly disappeared and the country is net importer of food crops. Agriculture recorded growth rate in 1975 at about 2.6% while the population grew at about 70% compared to 57.7% in 1993. The small scale farmers according to the National Agriculture Policy Document of Nigeria (NAPDN) constitute over 90% of the food and fiber requirement of Nigeria on the other hand 1% of farmers out put in Nigeria. But tend to have greater access to farmers inputs including credit or loans.

1.2 STATEMENT OF THE PROBLEM

This study is to investigate and analyze the problems associated with obtaining credit financing agriculture production in Ekiti State it would be seen that many problem arise mostly are problems encountered by the farmers in the area.

1. The inability of the farmers to meet up with the collateral security required. By the commercial bank is a major problem hindering agriculture sector. This is as a result of farmers to deposit the collateral security before obtaining credit for agriculture development.
2. High interest rate is another factor that discourages farmers from obtaining credit in most commercial banks, payment of interest involve when fund is borrowed.
3. The low educational background of the farmers also constitutes hindrance in obtaining agricultural credit.
4. The bureaucratic process involved in the process of obtaining credit or loans for agricultural purpose have not being encourage on the part of the farmers.
5. Credit facilities are not easily accessible to small farm holders. It is not that the researcher intends to identify some of the hindering factor in order to proffer solution.

1.3 PURPOSE OF THE STUDY

The main purpose of this study is to find the major problems of obtaining credit of loans for financing agricultural production in Nigeria with particular reference to Ekiti State. The objectives of the studies are.

1. To identify the problem militating against adequate financing of agriculture.
2. To enumerate and analyze the agriculture credit grant to farmers in recent years.
3. To find out how much the commercial bank have helps in financing agriculture.
4. To look at how agriculture has developed in Ekiti State.
5. To create awareness of the problem posted by agricultural financing inadequacies.
6. To investigate how these problems can be tackled.

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