PEASANT AGRICULTURAL FINANCING IN NIGERIA A CASE STUDY OF THE OPERATIONS OF AGRICULTURAL CREDIT GUARANTEE SCHEME FUND (ACGSF) IN THE IDAH LOCAL GOVERNMENT AREA OF BENUE STATE

PEASANT AGRICULTURAL FINANCING IN NIGERIA A CASE STUDY OF THE OPERATIONS OF AGRICULTURAL CREDIT GUARANTEE SCHEME FUND (ACGSF) IN THE IDAH LOCAL GOVERNMENT AREA OF BENUE STATE

Abstract:

Nigeria has over the years instituted policies and scheme aimed at making credit available to the peasant farmers. One of such policies is the directive to Commercial Banks to give a specified percentage of their loans to Agriculture. The Commercial Banks in carrying out this directive often not only fall short of Government prescribed percentage, but also deny the peasant farmers access to their credit due to their inability to meet up with the banks’ demands especially the colateral requirement. It was to assist the peasants in obtaining loans from the commercial banks that the government thought it was necessary to establish special scheme which can give some relief to the commercial banks by guaranteeing a part of the loans given by the banks. One of such schemes is the Agricultural Credit Guarantee scheme (ACGS). This study was designed to find out the operations of the ACGSF in Idah Local Government Area of Kogi State. Two seperate questionnaires for the farmers and the Commercial Banks were designed and administered in the Local Government. The following findings were made; i) Informal Financial sources of Credit still dominate the rural credit environment despite the operations of the Scheme in the Area. ii) The Commercial Banks do not meet up with the required loon percentage to the farmers despite the government guarantee level, iii) Even where the banks granted loans under the scheme, the peasants for who the scheme was designed never benefited much. Some factors were discovered to be responsible for the apparent failure of the scheme in the area. The peasant farmer do not repay loans promptly; the commercial banks, on their own part, fail to extend adequate credit to the peasants due to some reasons. Reasons which include none provision of acceptable securities by the peasant farmers. Finally, the Central Bank default in paying claims by the Commercial Banks also contributes to the malfunctoning of the scheme. Proper functioning of the different parties in the scheme was recommended by the study for the successful implementation of the scheme for the benefit of the peasants and the nation as a whole

PEASANT AGRICULTURAL FINANCING IN NIGERIA A CASE STUDY OF THE OPERATIONS OF AGRICULTURAL CREDIT GUARANTEE SCHEME FUND (ACGSF) IN THE IDAH LOCAL GOVERNMENT AREA OF BENUE STATE

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