ABSTRACT

The Agricultural Credit Guarantee Scheme Fund (ACGSF) was established in 1977 with the aim of enhancing commercial banks’ loans to the agricultural sector in Nigeria with focus on agro-allied and agricultural production. But the scheme has been unable to achieve the desired level of funding that will take the countries Agriculture to the crucial threshold of self sustainance and growth. The above was assessed with a view to establish interaction between ACGSF and credit risk using the ordinary least squares. The study found, among others, that there exist a long-run relationship between ACGSF and credit risk. It was therefore recommended that commercial bank should increase loan procedures, banks should also employ a good lending policy, banks should keep accurate and timely data, research and development should be increased for new methods to be adopted.

TABLE OF CONTENT

Title page………………………………………………………………………….i

Declaration……………………………………………………………………….iii

Certification………………………………………………………………………iv

Dedication…………………………….……………………………………..……v

Acknowledgement…………………………………………………………..……vi

Table of content………………………………………………….………………vii

Abstract…………………………………………………………………………….x

CHAPTER ONE: INTRODUCTION

1.1       Background of the Study…………………………………………………….1

1.2       Statement of  Research Problem…………………….………………………..2

1.3       Objectives of the Study…………………………….…………………...……3

1.4        Significance of the Study…………………………………………...……….4

1.5        Research Questions………………………………………………………….4

1.6        Statement of Research Hypothesis………………………………………. ... 5

1.7        Method of Analysis………………………………………………………..   5

1.8        Scope of the Study…………………………………………...…….………..6

1.9        Limitation of Study………………………………………………….………6

1.10          Plan of Study……………………………………………………….………..6

1.11          Definition of Terms………………………………………………………….7

CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction……………………………………………………………………..9

2.2 Review of related literature……………………………………………………..9

2.3 Theoretical framework………………………………………………………….20

2.4 Credit risk management : policies and procedures……………………………...23

2.4.1 Management policies to reduce credit risk…………………………………….25

2.5 Credit culture…………………………………………………………………….27

2.5.1 Characteristics of a good credit culture……………………………………….28

2.5.2 Signs of a distorted credit culture……………………………………………..29

2.5.3 Assessing credit risk management capacity………………………...…………30

2.6 Lending processes……………………………………………………………….31

2.6.1 Human resource analysis………………………………………………………32

2.6.2 Information flows………………………………………………………………32

2.6.3 Challenges of credit risk management in Nigeria………………………………33

2.6.4 Credit risk management process………………………………………………..34

2.6.5 Factors causing credit risk ………………………………………………..……34

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Introduction…………………………………………………………………….36

3.2 Re-statement of research hypothesis……………...…………………………….37

3.3 Data sources and measurement………………………………………………….37

3.4  Model specification……………………………………………………………..38

3.5 Apriori specification……………………………………………………………..40

3.6 Method of data presentation and analysis……………………………………….41

CHAPTER FOUR: PRESENTATION AND ANALYSIS OF RESULT

4.1 Introduction……………………………………………………………………….44

4.2 Analysis and presentations………………………………………………………..45

4.3 Interpretation of the regression result……………………………………………..49

4.4 Testing of hypothesis and discussion of results………………………………..…50

CHAPTER FIVE: SUMMARY OF FINDINGS, RECOMMENDATION AND   CONCLUSION

5.1 Introduction………………………………………………………………………..53

5.2 Summary of findings……………………………...……………………………….54

5.3 Recommendations ………………..…...…………………...………………………55

5.4 Conclusion………………………………….……………………………………...56

5.5 Contribution to Knowledge………………………………...……………………….57

References………………..……………………………………………………………..59

Appendices………………….…………………………………………………………..63