THE ROLE OF BANKS IN FINANCING AGRICULTURAL CO-OPERATIVES SOCIETIES IN NIGERIA
(A CASE STUDY OF NIGERIA AGRICULTURAL CO-OPERATIVE AND RURAL DEVELOPMENT BANK (NACRDB) IN ENUGU  
ABSTRACT
This research project is a very crucial study on the Role of Nigeria Agricultural Co-operative and rural Development Bank.   The study is motivated by the necessity to establish the extent of Agricultural Co-operatives.
To solve the research problem primary and secondary data was collected.  The data were questionnaire and oral interview.  The respondents comprised of personnel of the bank in organizing and presenting data collected, tables’ frequencies and percentages were used.  Data analysis and interpretation give the following findings:
1.         Criteria for granting loan to co-operative is that they have an account holder, have viable and bankable project and should be credit worthy.
2.         The impact of NACRA has been very much via FEAP, NACB through micro and macro loans and PBN loans to co-operatives
3.         Collateral Securities do not pose much problem to give facility to farmers.
4.         Insurance cover is necessary to cover some degree of risk involved co-operative failure.
5.         The level of response to wards loan facilities is very satisfactory.
6.         Loan management by co-operatives is very satisfactory.
7.         When loan is not repaid, the guarantors are involved and auction of any real estate mortgaged.
Based on the findings the researcher recommends that:
Banks should constitute a feasible alternative for providing financial assistance to support all efforts for further development of co-operative sector.
Banks should develop their farmers by allowing agricultural loan to cover all stages of agricultural production consultation of agricultural specialist by farmer if need be lending should be basically for agricultural activities.
The conclusion of the study is the role NACRDB has major contribution to make in field of agricultural credit.  It has proved to be an important channel in providing financial services particularly, credit to small farmers.
TABLE OF CONTENTS
CHAPTER   ONE
1.0       Introduction
1.1       Background of the Study
1.2       Statement of Problem
1.3       Significance of the Study
1.4       Objective of the Study
1.5       Scope of the Study
1.6       Limitation of the Study
1.7       Research questions
1.8       Statement of Hypothesis
1.9       Definition of Terms
            References
CHAPTER TWO
2.0       Review of Related Literature
2.1       Problems of Agricultural Finance and Credit in Nigeria
2.2       Agricultural Credit Policies in Nigeria
2.3       THE role of Financial Institution in Development of Agricultural finance
CHAPTER   THREE
3.0       Research Design and Methodology
3.1       Area of Study
3.2       Sample and Sample Procedure
3.3       Instrument for data Collection
3.4       Validation of Instrument
3.5       Reliability of Instrument
3.6       Method of Data Collection
CHAPTER   FOUR
4.0       Presentation and analysis of Data
4.1       Testing Hypotheses
4.2       Summary of Results
CHAPTER FIVE
5.0       Summary of Findings, Conclusion and Recommendations
5.1       Summary of Findings
5.2       Conclusion
5.3       Recommendations
5.4       suggestions for Further research
BIBLIOGRAPHY
APPENDIX
CHAPTER   ONE
 1.0       INTRODUCTION
Banks are financial house with the authority to guide groups and individual who could be having monetary transaction to do.  The provision of sound financial regulations that make for economic well being is very essential and the assistance of financial house in building up a safe terrain of monetary reserves is very important.  The well directed influence of vital banks on the larger society, as a whole is always something to admire every time.  The need to have on economic group well tasted and approved of with the education of members of the society in forming a financial viable social ground belong in the part to the intelligent services rendered by banks.
In Agricultural Co-operative societies, where individuals who hold agricultural stock could pull their resources together when union of these stockholders could amount to a greater gain to the advancement of their individual well being and collective aspiration, the expertise of bank posted to assist piece groups material comes by with a great relief government has whole lot of work load to carryout financial or otherwise and so has not much moment to supervisor minor economic units.  She has to assign a duty to her agencies these agencies as the dog in the wheal of the success of such co-operative societies and of the same time supply the necessary materials for their improvement and standard procedure.  Special agro allied banks have been set up under the auspices of the Apex Bank to grant material aid to agro-stock holders.  These Banks are viz.:
•Commercial Bank Limited Nigeria
•Agricultural Co-operative and Rural Development Bank
These financial institutions have the authority to deal on multiple problems traumatizing agriculture and formation of agro Unions in Nigeria.  The Bank of agriculture is becoming so highly modernized so that it will take a lot of money to produce food and cash crops in much profitable abundance.  If is with these in mind that government has arranged with her many agencies to bring some relief to aspiring agro stockholders.
Banks in any nation have the keynote to play on unfolding the financial success in the economy.
1.1       BACKGROUND OF THE STUDY
Agricultural Co-operative society is a venture by some farmers who hold agricultural stock and are seeking to uplift their collective and individual agricultural standards.  These standards range from planting tag techniques to seed procuring and from financial subsidization to produce display in proper places.  Agricultural Co-operatives provide useful services where none exists especially one that would be uneconomic for individual ownership.  To induce excessive cost of middlemen, help farmers get a fair share of national income, direct Agriculture towards the goals of national economic planning and generally to improve the social economic planning and generally to improve the social and economic conditions of Rural people.  They seek for favourable trends such as loan, scheme, planting, crucial, banking services and general market safety regulations ignorance of new methods, benefits and possible support from responsible agencies have killed an idea to turn Agriculture around for the better, Banks being organized.  Financial units that can monitor research, cash flow and general economic trends happen to be a greater ease to deal with farmers.
 The ideal relationship between the financial houses and farmers as individuals or as co-operatives could not be over emphasized.  Individual farmers could find relative bank services fit for a great initiative transformation.  Financial scheme that enable peasant transformation into giants in Agriculture are abundant such as a loan in agricultural co-operative Society where many individuals pull researches together.  The level in individual maturity and productivity capacity could not be reckoned with.
With the foregoing points, I wish to point out that the prime focus of this study is to found out how bank been able to finance agricultural productivity.
In other accomplish this study Agricultural Co-operative and Rural Development Bank (NACRDB) has been selected as a case organization.  The Nigeria Agriculture and Co-operative Bank (NACB) is a specialized bank primary set up to enhance investment in Agriculture.  It was established bank primary set up to enhance investment in agriculture.  It was established in 1973 and was commissioned in 1975.  Recently, it was merged with people bank and the family economic Advancement Programme (FEAP) in 2002 and now it was called Nigerian Agriculture Co-operative and Rural Development Bank.  It grant loan to small holders and large investment holders.  Its major problem is inaccessibility of credit by small scale farmers, this problem is solved by putting emphasis on co-operative formation.
Its objective includes efficient and effective credit administration with target beneficiaries being rural poor.  The minimum percentage of interest rate emerges when loan is granted is 8% maximum loan amounts are revised upward depending on timely repayment of previous loans and client invest.  This loan product carried a confessional interest rate, which was as of 1998 was 15% per annum.
1.2       STATEMENT OF PROBLEM
There have been concentrated efforts by government to enhance Agriculture productivity in Nigeria, for instance, the Federal and State Government have set up some agencies like Nigeria Agricultural co-operative and Rural Development Bank, to help small stockholders by granting them loan to improve Agriculture production.
But in spite of all the effort being made, farmers still experience low or decrease in production, due to the fact that farmers do not have collateral to offer.  List of crop failure earn be very high, interest charged can be too high for the returns from economic activities, records are not properly kept for lack of insurance coverage.
What are the causes of this low productivity in agricultural co-operative?
What can be done to remedy the situation to make recommendation as to how bank can increase his effectiveness towards agricultural production?
1.3       SIGNIFICANCE OF THE STUDY
This study is very timely especially now that all hands are on deck to enhance the development and growth of Nigeria economy.  This study will help farmers to know the immense benefit of banks in financing agriculture in addition lack of credit is a major factor.  For the lack of development of agro business, hence it is required to buy inputs and improved technology.  It is expected that this findings will help us to know that credit is a major accelerator of development, if other essentials needed for development are available, through this investigation, therefore both banks and co-operatives will understand their short coming or made points and will subsequently adopt measure aimed of enhancing agriculture effectiveness and development.
 It will also help government to adopt the right Agro business credit policies to enhance credit effectiveness.  This study will help us to know the constraints in credit availability to farmers.
1.4       OBJECTIVE OF THE STUDY
The general purpose of this project is to undertake a study on the Role of Banks in Financing Agricultural Co-operative.  The study will address the following objectives:
1.         To determine the causes of low productivity in agricultural co-operatives.
2.         To determine what can be done to enhance Agricultural production.
3.         To appraise the contribution of banks to the profitability of Agricultural development.
4.         To make recommendation as to how bank can increase its support in agriculture co-operative.
1.5       SCOPE OF THE STUDY
This research study is limited to the geographical and political boundaries of Nigeria in general, Enugu Metropolis in particular.  It involves only Nigeria Agriculture co-operative and Rural Development Bank.  Among other financial institutes, this research study is to ascertain the Role of banks in financing agricultural Co-operative.  How they have been able to facilitate the development of Agricultural Co-operative and to boast small stockholders and large-scale investors.  Nigerian Agricultural Co-operative and Rural Development Bank  (NACRDB) is being used as the case study.
1.7       RESEARCH QUESTIONS
Have banks been able to improve the efficiency of agricultural production in large scale?
Have banks inputs been able to increase the volume of yield and manpower resources?  
Has it been able to increase the income of farmers?
Has it been able to make for easy access availability of credit of farmers?
1.8       DEFINITION OF TERMS
CO-OPERATIVE FARMING        :           Is used to denote collective
farming.  
COLLECTIVE FARING                :           This implies the entire members,
pooling resources and land together for co-operative farming.
RETURNS                                                    :           These are monetary value resulting
from scale of output.
PROCESSING                                              :           Farm produces under goes some
degree of change.
SUPPLIES                                                     :           Farm inputs which are also referred
to, as capital goods that are produced and distributed for further production.
BUDGETING                                               :           Planning for future with
respect to expenditure and income.
COLLATERAL                                           :           The assets to be offered as a
security to produce credit.
GROP LOAN/CREDIT                               :           Non individual credit which funds
for productivity purposes are extended to group of farmers.
RISK                                                              :           Unforeseen negative eventualities.
CAPITAL                                                      :           Money used to start a business.