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Title Page – – – – – – – – – – – i
Certification – – – – – – – – – – ii
Dedication – – – – – – – – – – iii
Acknowledgement – – – – – – – – – iv
Abstract – – – – – – – – – – – v
Table of Content – – – – – – – – – vi
1.0 Introduction – – – – – – – – – 1
1.1 Background Study – – – – – – – –
1.2 Statement of the Problem – – – – – – –
1.3 Objective of the Study – – – – – – –
1.4 Hypothesis of the Study – – – – – – –
1.5 Significance of the Study – – – – – – –
1.6 Scope and Limitation of the Study – – – – –
2.0 Theoretical Review – – – – – – – – –
2.1 Agricultural Development – – – – – – – –
2.1.1 Agricultural Credit Guarantee Scheme Fund (ACGSF) – – –
2.1.2 The National Fadama Development Project – – – – –
2.1.3 Agriculture and Export Earnings – – – – – – –
2.1.4 Agriculture and balance of Payment – – – – – –
2.1.5 Agriculture and Food Supply – – – – – – –
2.1.6 Agriculture and Employment – – – – – – –
2.1.7 Past Efforts at Revamping Agriculture in Nigeria – – – –
2.2 Empirical Literature Review – – – – – – – –
3.0 Research Design and Methodology – – – – – –
3.1 Design and Methodology – – – – – – – –
3.2 Model Specification – – – – – – – – –
3.2.1 Dependent Variable – – – – – – – – –
3.2.2 Explanatory or Independent Variable – – – – – –
3.3 Structural Presentation of the Model – – – – – –
3.4 Mathematical Presentation of the Model – – – – –
3.5 Method of Evaluation – – – – – – – – –
3.6 Data Required and Sources – – – – – – – –
4.0 Presentation and Analysis of Result – – – –
4.1 Regression Result – – – – – – – –
4.2 Result Interpretation – – – – – – –
4.2.1 Evaluation Based on Economic Criteria – – –
4.2.2 Statistical Test (First Order Test) – – – – –
4.2.3 Econometric test (Second Order Test) – – – –
4.3 Policy Implementations – – – – – –
5.0 Summary of Findings, Recommendation and Conclusion –
5.1 Summary of Findings – – – – – – –
5.2 Recommendation – – – – – – – –
5.3 Conclusion – – – – – – – – –
References – – – – – – – – –
The study examines the role of commercial banks in Agricultural
development in Nigeria, spanning from 1986-2010. The methodology used is
ordinary least squares (OLS), using P.C give 8.00 package. The findings
from the study support the view that commercial bank loans are not getting
to red farmers. The commercial banks loan to Agricultural sector is positive
and significant at 5% level, contributing 67.65 percent variations in Real
Agricultural output in Nigeria. Real interest rate and real exchange rate are
both positive, but not significant at 5% percent level. The positive real
interest rate shows that Investments in Agricultural sector in Nigeria has a
very high rate of return. The findings suggest that real interest and exchange
rates should be properly managed and periodically received so as to
promote the growth of the Agricultural sector.

Agriculture involves the cultivation of land, raising and rearing of
animals and raw materials for industries. It involves cropping live stock,
forestry, and fishing, processing and marketing of these agricultural
Food is man‟s most important basic need before those of clothing and
shelter. It is provision therefore, has been the major concern of man from the
past years since it is both an essential condition and sinequanon to life.
Agriculture being the provider of food can then be concluded as the life wire
of any nation and thus be concluded as the life wire of any nation and thus its
importance cannot be over emphasized.
When Nigeria gained their political Independence in 1960, agriculture
was dominant sector of the economy. It contributed over 65% of the
country‟s Gross Domestic Product (GDP) and provided the bulk of the
foreign exchange earnings through the foreign exports of the cash crops. The
sector catered adequately for nearly all food requirement and raw materials
for industry in the country. Agriculture performs a number of functions in
an economy such as:
Nigerian agriculture is confronted with many problems which ranged
from low yield to low productivity and inadequate facilities among others.
Oyatooye (1981) was on the same path when he noted that the problem of
agriculture in Nigeria can be discussed under four headings.
I. Technology
II. Marketing
III. Finance and Government
Such problems include problems of providing adequate extension
services, agricultural inputs, storage facilities, agricultural credit, marketing
information and efficient marketing arrangement, infrastructures such as
feeder roads efficient power supply and institutional reforms where
necessary. William (1981) pointed out that, the major problems facing
Nigeria today are the needs to transform her agricultural industry from one
traditional input with low productivity to one which enables her to meet the
rising expectations of her people and to correct the social and economic
imbalance created by lopsided development between her rural and urban
areas which have encouraged the youths and others to migrate from rural
His statement is a valid one as when it was made from we have seen, the
Nigerian economy is characterized by a high degree of rural to urban drift in
search of greener pastures leaving the farm land to old aged men who are
unable to provide all the food requirements of the growing population. This
is responsible of the growing population. This is responsible for the high cost
of food as there is pressure on the little produced.
Adekanye‟s assertion (1988) when he stated that: it is a common
knowledge that present farmers and artisans who the back of the rural
population do not get adequate and timely loans from financial institutions
and they have no collateral and equally they do not get supplies of raw
materials of standard quality even at the market place as they come under the
ditches of rich farmers and sellers in the urban areas. The need for setting up
of rural based commercial banks is very urgent.
The main objective of this study is to assess the role of the commercial
banks in agricultural development in Nigeria from 1986-2009. Specifically
the study tends to be achieving the following objectives.
I. To access the scope and achievements as well as highlight new role of
Nigerian Commercial Banks to Agriculture.
II. Identify the inherent problems of agricultural financing which have
hindered the smooth flow of credit from banks to agriculture.
III. To offer solutions to identified problems.
The hypothesis guiding this study are of two type H0 which is the null
hypothesis and H1 which is the alternative hypothesis H0 is that the Banking
Industry has played an important role in agricultural development in Nigeria.
H1: is that the Banking Industry has not played an important role in
agricultural development in Nigeria.
This study is useful in many ways.
Firstly, Nigerian farmers can know the type of credit or assistance
offered by Nigerian Banking Industry and the benefit from them.
Secondly, it will help to update knowledge on how the banks especially
commercial banks in Nigeria, thus making it useful for other researchers,
schools and readers.
Thirdly, it will enable the Nigerian government to take advantage of the
suggestions and more result oriented policy towards boosting agricultural
production in Nigeria.
Finally, the salient findings of this study will also make the farmers to be
more result oriented in agriculture.
This study covers the period between 1986-2009; it will be an
oversight to think that study such as this will be accomplished without
impediments and constraints. Much as it seems incontrovertible that odds
will be imminent there are some glaring inexorable cases.
Some respondents to interviews are always simplified and simplify in
relating information to researchers.
Again, to think of development only in terms of increasing agricultural
output is an under statement.
There is also the clamored non-existence of relevant and indispensable
literature as versatile as possible.
The limitation put together explains why the research is scaled down from
The study only centers on the role of commercial Banking in
agricultural development and factors surrounding their credit decisions to
agricultural sector.
Thus, it only assessed the performance of the banks in executing the
role of financing agriculture.
Since it was not possible to get the whole information needed in this
study, the study is limited to the Nigerian Economy. The study is equally
limited by time and limited sources of data. There are time constraints in the
process of carrying out research due to in accuracy of data. It is sometime
possible to underestimate or over estimate.


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