The major function of the Nigerian Agricultural, co-operative, Rural and Development Bank is provision of loans and advances to individual and corporate farmers.

However, there are series of reasons for the need for special funding towards agricultural sector. The agricultural sub-sector is saddled with peculiar risks, risks that can hardly be diversified; illiteracy and ignorance; culture; interest rate, etc

Loan defaults occur when the borrowers cannot meet up the repayment of principal and interest within the maturity time stipulated by the bank. Loan defaults have continued to increase tremendously, and it forms the major discouraging factor to the NACRDB in loan or credit extension.

Furthermore, tin the course of financing agriculture the NACRDB is faced with series of problems. Such problems i9clude unsystematic risk, time lag, poor infrastructural facilities, loan diversion, slow rate of return, collateral, government policies, political instability etc.

In other to identify these problems and the measures to solve such problems, the researcher made use of the secondary sources of data as well as partly, the primary source of data.







Title page                                                                                ii

Approval page                                                                        iii

Dedication                                                                               iv
Acknowledgement                                                                             v

Abstract                                                                                  vi

Table of content                                                                      vii

Introduction                                                                                      1

1.1  Statement of problem                                                                  2

1.2   Rationale of study                                                            2

1.3  Definition of term                                                              3


Review of related literature                                                     5

2.1    the concept of agricultural financing                                 5

2.2    Evolution of the NACB                                                    6

2.3    Overview of the NACRDB                                                         7

2.4    The need for Agricultural financing                                  9

2.5    Objective of NACRDB                                                     11

2.6    Role of NACRDB                                                             12

2.7    Lending Operations                                                          14

2.8    Problems of Agricultural financing in Nigeria                            15

2.9    Measures to prevent the problems of                     

Agricultural financing in Nigeria.                                               20


3.1            Statement of Hypothesis                                                         21

3.2            Research methodology                                                   22

3.3            Sources of Data                                                             23

CHAPTER FOUR                

DATA PRESENTATION AND ANALYSIS                          24

4.1            Data presentation                                                          24

4.2            Data Analysis                                                                31

Summary, Conclusion and Recommendation                                   39

5.1                  Summary                                                                     39

5.2                  Conclusion                                                                  41

5.3                  Recommendation                                                                  42

Bibliography                                                               43





The role of the Nigeria Agricultural and co-operative Bank can not overemphasized. According to ugwuanyi (2002), there have been series of efforts. By the NACB in providing short, medium and long term finance to the Agricultural sector of the economy. This is aimed at making farmers to increase their problem, as well as adopting the mechanized system of farming. Anyanwu (1993) stated that it is also meant to encourage or create employment opportunity for the unemployed in the nation.

However, inspite of all the effort being made, the objective of increase in productivity can not actually be said to have been attained. Many people feel reluctant to go into agriculture, instead they seek for other job opportunities. On the side of the NACB, it feels reluctant in extending credit to some categories of farmers.

What actually are the reason for these set back? Could it be as a result of the rate of interest on loan amount? Could it be as a result of loan default? Could it be as a result of the amount being requested for? Could it be as a result of the nature of collateral involved?

Therefore, the researcher intends to investigate on the reason for all these set backs.


1.2            RATIONALE OF STUDY

In respect to the rationale of study, the researcher intends to justify her reason for laying emphasis on this particular topic.

However, what motivated the researcher to write on this topic is as a result of the prevailing problems facing the NACB in Agricultural financing in the society.

Therefore, this study or research work will contribute immensely to improve the in dept knowledge of those in Agricultural sector as well as the NACB in respect to the role of NACB in Agricultural financing.



The usefulness of this research work can not be absolutely exhausted. However, individuals and groups of individuals will benefit from this research work, mostly those who are ignorant of the essence of the establishment of the NACB.

Also, those in Agricultural sector will also benefit from this research work. This is by having indept knowledge on how the NACB operate in terms of extending short, medium and long – term credits to farmers.

Conclusively, those in various schools of agriculture and other institute of higher leaning will benefit immensely from this work


1.3            DEFINITION OF TERMS

AGRICULTERAL FINANCING:- According to Uguwanyi (1999), Agricultural financing is the sourcing of fund and making it available for agricultural production and uses. That is, it involves the acquisition and utilization of funds for agricultural purpose.

NACB Nigeria Agricultural and co=operative Bank, which was established to fill the financial gap in terms of credit extension to the co=operatives and the agricultural sector.

NACRDB – Nigerian Agricultural, co-operative and Rural Development Bank, which was formed as a result of the merging of the inability of the NACB to meet up with its responsibilities.

NECHANISED SYSTEM OF FARMING:-  This implies the system of farming with the aid of  machines, such as tractors, bulldozer or Catapilers, Ploughs, etc.

COLLATERAL:- This is also referred to as security. It can be described as an item which a borrower deposits to a bank in hence of the loan amount, of which the bank will later consider in the case of default by the borrower.


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