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MANAGEMENT OF RISK IN AGRICULTURAL FINANCING (A CASE STUDY OF NIGERIA AGRICULTURAL AND COMMERCE BANK PLC, ENUGU BRANCH)
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Approval page
Dedication
Acknowledgement
Table of contents
AbstractCHAPTER ONE:
1.0 INTRODUCTION OF MANAGEMENT OF RISK IN AGRICULTURAL FINANCING
1.1 Background of the study
1.2 Statement of the problem
1.3 Objectives of the study
1.4 Significance of the study
1.5 Statement of hypothesis
1.6 Research Question
1.7 Scope and Limitation of the study
1.8 Definition of termsCHAPTER TWO:
2.0 LITERATURE REVIEW OF MANAGEMENT OF RISK IN AGRICULTURAL FINANCING
2.1 Project Management
2.2 Management Techniques
2.3 Role of Finance in Agricultural development
2.4 Risk in agriculture
2.5 Poverty alleviation through agriculture
2.6 Farmer defence against risk and uncertainty
2.7 Uncertainty precautions
CHAPTER THREE:
3.0 RESEARCH DESIGN AND METHODOLOGY OF MANAGEMENT OF RISK IN AGRICULTURAL FINANCING
3.1 Source of data
3.2 Source of primary data
3.3 Source of secondary data
3.4 Literature question
3.5 Sample used
CHAPTER FOUR:
4.0 DATA PRESENTATION AND ANALYSIS OF MANAGEMENT OF RISK IN AGRICULTURAL FINANCING
4.1 Presentation of data
4.2 Analysis of data
4.3 Test of hypothesis
4.4 Interpretation of result
CHAPTER FIVE:
5.0 SUMMARY OF FINDING
5.1 Discussion of finding
5.2 Conclusion
5.3 Recommendation
Bibliography
Appendices
From the study, it is apparent that fund is the vehicle that moves the agricultural and commerce bank forward. When the fund is not sufficiency available, the possibility of lending would decrease. Such decrease is attributed to the high risk involved in financing agricultural products particularly the rearing of animals and production of crops aspect of the business.
It is expected that when funds are made available to farmers, the funds ought to be paid back within the record time so that the bank would re-invest them, a sort of revolving scheme.
However, farmers most time do not re-pay the loans granted to them. Government on the other hand ought to serve as financial shield to the agriculture and commerce bank often do not bring forward the guarantee loan in order to caution the effect of losses. To this end therefore, the business of lending mercy to farmers to engage in agriculture is slowed hence shortage of food and other agricultural produce continue to rise in Nigeria inspite of the enormous fund invested in agriculture.
It is worthy to mention here that apart from the problem of the bank in financing agricultural programmes could be attributed to dishonesty in the system.
During the then president of Federal Republic of Nigeria, huge sums of money was maped out for agriculture and the citizens were urged to form themselves into co-operations in order to access the loan. Greater percentage of that money never saw the light of the day. The very few that collected the loans were not able to pay back owing to poor supervision, the already existing poverty level of the beneficiaries among other factors.
These factors indeed affected the lending behavior of the bank responsible for agricultural loans. Suffice to say therefore, that the management of risk in agricultural financing is quite cumbersome.CONCLUSION
Management of risk in agricultural financing appears very cumbersome especially in Nigeria. Apart from the natural disaster which could occur, the farmers who receive these loans most often find it rather difficult to pay back the loans granted. Thus, the bank even though may have the collateral from the farmers is faced with the challenge of unpredictable climate which if not in their favour would lead to loss of investment make and again human problem resulting from poor re-payment attitude of the borrowers. Thus as the bank is trying to manage the risk inherent in financing agricultural products, the bank equally manage human behavior which indeed appear to be much more difficult.
The government which suppose to be a shield to the loans guaranteed to farmer by the bank is not forth doing so. This affects the lending behavior of the concerned bank hence the risk involve in agriculture is refereed to as catastrophic.
RECOMMENDATIONS
From the forgoing in the study, the researchers made the following recommendations
(i) Government should provide enough fund for the agricultural financing. This is pertinent in view of the fact that enormous risk is involved in financing such project.
(ii) Government should create a department whose responsibility is to ensure that al the technical know-how are put in place before famers make investment in their business of agriculture. Such personnel would equally monitor the development and growth of the business.
(iii) Strict measures should be employed to ensure that farmers who collected loans pay back as and when due. This would reduce the risk involved in lending money.
(iv) There is the need for government to take into cognance of the macro economic forces that affect investment made or about to be made. For instance, the interest rate and instability in the exchange rate. This has great impact on the management of risk of financing agriculture.
(v) There is need to be organizing work-shops and seminars for farmers. This would enable the farmers appreciate the essence of lending loans by banks thereby reducing the likelihood of diverting the fund.