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Title page

Approval page




Table of content



1.1        Background of the study

1.2        Statement of problem

1.3        Objective of the study

1.4        Research Hypotheses

1.5        Significance of the study

1.6        Scope and limitation of the study

1.7       Definition of terms

1.8       Organization of the study




3.0        Research methodology

3.1    sources of data collection

3.3        Population of the study

3.4        Sampling and sampling distribution

3.5        Validation of research instrument

3.6        Method of data analysis



4.1 Introductions

4.2 Data analysis


5.1 Introduction

5.2 Summary

5.3 Conclusion

5.4 Recommendation












This work is designed to examine the problems faced by small farm holders in accessing loan facilities in Ovia North East Local Government Area of Edo State. The researcher examined the role of commercial banks in financing agriculture in Edo State. Recommend actions were made to resolve the problems faced by small farm holders in accessing loan facilities in Ovia North Local Government Area of Edo State questionnaires were designed in such a way to be able to elicit unbiased response from respondents. The questionnaire designed for this study was divided into two segments. There were questions meant for the entire respondents, while others are meant for the respondent who have obtained loan under the agriculture credit facilities scheme








  • Background of the study

Most issues discussed in Nigeria agriculture these days relate to problems associated with agricultural development. It is believed that the agricultural sector of the economy remains the main economic stay of the nation despite the revolution in other sectors of the economy like banking industry, oil industry and communication industry among others. Agriculture provides the greatest avenue for employment, income and food for Nigerian populace (general public). The agricultural sector have been an important component of the Nigerian economy with peasant farmers producing over 90% of available food in the country and 70% of the labour force relying on this sectors. The Nigerian agriculture is made up of mainly peasant farmers and majority of these rural farmers live in the rural area and operate at subsistence level with land holding average of less than five hectares. Farmers are faced with the problems of low productivity, inadequate access to logistic support and input, crop infestations, pest and diseases and massive loss of crops and animals. Small holder farmers engage mostly in mixed farming and cropping in order to ensure steady flow of income. The decline in the Nigerian economy particularly in the area of productivity has often been blamed on lack of credit facilities which prevented many farmers from adopting improved practices, since some of them lack the collateral needed to secure loan or credit from financial institutions. Agricultural credit is any of the several credit vehicle used to finance agricultural transaction, including loans, notes, bills of exchange and bankers acceptances. These types of financing are adapted to the specific financial needs of farmers, which are determined by planting, harvesting and marketing cycles. Short term credit finance operating expenses, intermediate term credit is used for farm machinery and long term credit is used for real-estate financing. According to, credit is regarded as a major factor in agricultural development and lack of it is usually given as an explanation for many of the problem facing the sector in the developing nations, if credit were made available, the retarded agricultural sector will start moving by their contributions to the modernization of the sector. 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 output in Nigeria. But tend to have greater access to farmers inputs including credit or loans.


This study is to investigate and analyze the problems associated with obtaining credit financing agriculture production in Edo 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.

The objectives of the study 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 Edo State.
  5. To create awareness of the problem posted by agricultural financing inadequacies.
  6. To investigate how these problems can be tackled.

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H0:     there is no problem militating against adequate financing of agriculture.

H1:   there is problem militating against adequate financing of agriculture

H02: the agriculture credit have not been granted to farmers in recent years

H2: the agriculture credit have been granted to farmers in recent years


This research study will be important to that future researcher in the economy and agricultural science who would like to use it as reference materials or for further investigation. The study is to create awareness to farmers in Edo State, the reason of low agricultural production and also to bring to the notice of the general public loans for financing agricultural production in the locality.  It will form a good basis to the government for the formulation of policies. To serve as encouragement to those farmers in the area of study.


The study is aimed at providing detailed knowledge and understanding of the operation function and to determine the problems of obtaining loans for financing agricultural production in Edo State through the Federal Government Agricultural Credit Guarantee Scheme (FGACGS) found since 1977 with the view of providing useful suggestion to ease the problem of agriculture development in Nigeria it is directed towards the application of problems obtained for financing agriculture view of this more emphasis will be placed in the success of credit facilities lending procedure as a criteria of measurement. The performance of the commercial banks in the regard will be assessed by using the present farmer’s areas to the agricultural credit facilities as well as the hindrance which the small farm holders face in obtaining loans from financial institutions. The researcher encounters some constrain which limited the scope of the study;

  1. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
  2. b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
  3. c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities




Credit: This is the process of obtaining control over the use of money, goods and services with promise to repay at a future data.

Agricultural finance: This means way and means by which a farmer obtains the entire necessary fund required in order to carryout agricultural production.

Interest: This means the price paid for the use of borrowed money and is usually expressed as a present on annuals basis.

Collateral: This means anything offered as a promised of loan repayment to be given to a lender in case of non-payment


This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study.



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