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In 2001 Nigeria in the quest to offset debt crises of economic problem mapped out specialized banks primarily set to entrance investment in agriculture and finance macro and micro credit especially within the rural communities.  Such banks are Nigerian agricultural co-operative and rural bank (NACRDB) development banks, industrial bank, and mortgage banks.  They grant loans to small holders and large investment holders.  These banks were designed as an avenue to get in contact with numerous farmers and business investors at the grass roots level.  Nigerian agricultural co-operative and rural development bank (NACRDB) is aimed at financing basically agricultural co-operative and other co-operative societies in the small scale business.

The research for the recovery of loans from clients include: lack of trained and experienced personnel in agricultural financing and loan administration on most of the commercial and merchant banks default in loan repayment resulting from poor project appraisal or management as well as outright unwillingness to repay by some borrowers, also problem related to settlement of loans is caused by the bank to file claims in accordance with procedure and passion stipulated by the banks, improper loan disbursement and  poor supervision.  Another problem could be caused by delay in approval due to low capital base on the banks as a result of inflation in the economic.  This delay may lead to misappropriation of funds which might eventually lead to losses.

The observed trend is that Nigerian Agricultural Co-operative and Rural Development Banks and other financial institutions are experiencing a high level of loan losses each year due to the shortcomings indicated earlier.  This is the obtaining at an insight into the problem of loan recovery and offering adequate and requisite suggestion.

This is the main reason why analysis of the loan default in Nigeria agriculture Co-operative and rural development banks (NACRDB) with the view of obtaining an insight in to the problem of loan recovery and offering adequate and requisite suggestion.



       Special banks have been set up in the country to advance loan and credit for development purpose.  Incidentally these banks have always find it difficult in recovering the advanced loans especially NACRDB which is the focal point of study.  In problem of credit recovery by these banks, it can be seen to range from lack of collateral.   Commitment, lack of trained and experienced personnel in agricultural financing and loan administration, to the default in loan repayment negotiation, poor project appraisal or poor project management, as well as simple uncollingness of  the borrower to repay borrowed money, equally seen as a problem towards loan recovery is whether the bank supervised the loan given to the borrowers, the inadequacy of the funds guaranteed in an inflating economic as well as low capital base ion the funds and finally difficulties associated with the deregulation of the financial market and distress of the banking industries in “go” which reduced the interest to participate in NAERDB’s operations, against these established shortcomings, the work will methodically study these areas of  shortcoming and suggest the solutions to the problem, for future guide against credit and loan defaults by NACRDB to the prospective customers.



       The  general objective of this study is to analyse loan default in Nigerian Agricultural Co-operative and Rural Development Bank (NACRDB).

The specific on objective of the study include:

  • To find whether or not co-operative societies secure loan from NACRDB.
  • To determine the condition for such loans.
  • To determine and examine the factors responsible for the loan default.
  • To determine and find out the problems that affect the organization in loan administration.
  • To find out the credit burden of such loan.



This study well expose the ways by which loan default in co-operative movement.  It is very big significant part from stimulating and paving way for further studying of this area, it will also provide a clear standing of these defaults and growth affecting NACRDB.  And it will also expose how good management loan can bring about greater happiness among co-operative co-operators, co-operative bodies individuals, all loaned and NACRDB Nkpor Zone.

This work has emanated from the performance of the co-operative credit institutions, especially the NACRDB Nigeria Ltd.  Its purpose is to help provide a true and objective position of NACRDB Nigers Ltd.  In that process, the following will be critically looked at:

  • There findings will help enable us to appreciate the contributors the NACRDB has made so far in the general economic and industrial development of Nigeria especially as regards in financing of co-operative societies.
  • It will also guide co-operative societies in tackling the various credit financing problems facing them and make full utilization NACRDB.
  • The study will also help those who may have need for further research on the financing of co-operative societies by development banks.
  • The findings will also help to make recommendation and suggestions for further improvement of the present situation.
  • Lastly, the work will be useful in addition to the existing research work, in the area of loan disbursement and recovery in our country and hence will serve as a reference to further researchers.



  1. To what extent are loan disbursed to Agric Coperative Societies by NACRDB in Nigeria?
  2. How regular is the loan disbursed to Agric Coperative Societies by NACRDB in Nigeria?
  3. What are the interest rates on Loans disbursed to Agric Cooperative Societies by NACRDB?
  4. At what rate do Agric Cooperative Societies repay their loans to NACRDB?
  5. What is the extent of loan default by Agric Coperative Societies in Nigeria?


This study covers the operations of NACRDB Nkpor Zonal Office with regards to its loan disbursement and recovery.  It looks at the operations of the banks in granting financial assistance to co-operative societies who are the users of fund to ensure their investment.  It also talk about how the NACRDB will uplifted to avoid failure in the society, with this it will enable the co-operative society to grow higher than expected with the help of the financial assistance.




Considering the dearth of textbook and reading materials in our environment, with its attendant consequences, coupled with the time limit for the completion and submission of the results of this study, the researcher was unable to exhaustively search for all the relevant materials. Distribution and retrieval of questionnaire were done with great difficulty and the delay by the respondent did not help matters.

These were indeed the research handicap not to mention the financial constraints. Therefore, the work is limited the data made available to the researcher and it is hoped that the quality and excellence at the study will be judged against the backdrop of these limitations.




For the purpose of this study, it is useful to make clear meanings at some major terms used specially for the purpose of the study such as terms are as follows:

(a)             LOAN ABLE FUNDS:  Loan able funds are money available for lending in financial market, the loan able fund theory holds that the rate of interest is determined by the force/rate of demand and supply of loan able funds in the capital market,

(b)   REGISTRAR:  This means the registrar of Co-operative Societies appointed under an appropriate section of co-operative law of any state or country and he can also be a person who is exercising such power or a registrar, as may have conferred on him under Co-operative law.

  • LOAN INTEREST: It is a portion of surplus value which an industrialist transfers to the bank or finance house as payment for using its loan.
  • CREDIT FACILITY: This is that which is meant to enable the beneficence to generate additional income which will in the long run time to attain reliance.

(e)   SELF RELIANCE:  Ability to verify oneself for survival and continuous development rather than relying on others.

(f)   MORTGAGE:  Conveyance of property like lands and buildings to a creditor as security for acquiring loans.




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