Economic analysis of the role of microfinance banks in funding agriculture in rural areas of Kwara State, Nigeria.
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Date
2013
Journal Title
Journal ISSN
Volume Title
Publisher
Directorate of General Studies, Federal University of Technology, Owerri
Abstract
The quest to meet the credit need of the Nigerian farmers
necessitated the focus of this study. Specifically, the study examined
the contribution of microfinance banks (MFBs) towards agricultural
development, analyzed and compared the loans given out by these
banks to agricultural sector with those given to other investment
activities in the study area, examined the repayment level of the
various sectors and identified the constraints hindering efficient
contribution of the banks to agricultural development in the study
area. Data obtained from ten MFBs in Kwara State were used for the
study. Descriptive and inferential statistics were used for data
analysis. The study revealed that most of the banks’ loan were
granted to trade and commerce sector while the agricultural sector
obtained just about one-fifth of loan disbursement annually. As
regard loan recovery however, the agricultural sector compared
more favourably than other sectors to which more loan was
disbursed. The problems facing the MFBs in making more
contribution to agricultural development in the study area include
less saving habit of farmer clients, limited loan products, shortage of
logistics in rural areas, less willingness of the commercial banks to
lend MFBs, shortage of experienced human resources, inadequate
capital to operate and lack of effective management information
system. The study calls for more contribution to the agricultural
sector by the banks and proffers solutions to the constraints limiting
their role in agricultural development.
Description
Keywords
Credit, role, microfinance banks, agricultural development, problems
Citation
14. Adewumi, M. O., Ayinde, O. E., Falola, A. & Adeyemi, O. O. (2013): Economic analysis of the role of microfinance banks in funding agriculture in rural areas of Kwara State, Nigeria. International Journal of Development and Management Review (INJODEMAR), 8(1): 159-171. Published by Directorate of General Studies, Federal University of Technology, Owerri, Imo State, Nigeria. http://www.ajol.info/index.php/ijdmr/article/view/91308