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Background of the study

        Nigeria is a nation that should depend on agriculture for their overall development. This statement cannot be over stated taking into consideration the size of Nigeria population that is involved directly and indirectly in agricultural practices. Most of our foodstuff and raw materials are derived from agriculture.  The agricultural sector is faced with many problems, which are constraints to economic development for instance, inadequate finance supply for agricultural projects. To curb this problem, the federal government established NACB. The Nigeria agricultural cooperative Bank is one of the financial institutions established as an excellent instrument for agricultural financing through which loans and grants would reach the farmers for agricultural purposes. Assessment of the Nigeria agricultural cooperative Bank is a way of determining the effectiveness, worth or impact of agricultural cooperative banks in enhancing agricultural activities in Idemili-south local government area of Anambra State.

        Agricultural financing involves ways and means by which a farmer obtains all the necessary assistance required both in cash and kind in order to carry out Agricultural production. Agricultural credit on the other hand refers to the process of obtaining control over the use of money, goods and services in the present for a promise to re-pay at a future time or date. With agricultural credit, the lender forgoes the use of his money in the present by giving it to a borrower who promises to re-pay at a future date and on the term specified in the loan agreement (Omoruyi e t al, 1991).

        Farmers need productive resources and these productive resources are either owned or borrowed fund. In agriculture, production is a continuous process beginning with planting of crops and animals and maintaining them till harvest time. The farmer only realizes some income only when he has sold his produce to an ultimate consumer.

        Before Nigeria attained her independence in 1960, agriculture provided most of foreign exchange and generated a significant proportion of government revenue. An estimated number of above 80 percent of the population were engaged in food production and there was enough food for the entire population (Olayide, 1990).

        Nigeria experienced a mild food problem some years after independence. Not much national concern was shown initially because; the problem was thought to be a temporary phenomenon associated with series of crises, which culminated in the civil war. The various governments merely made modest efforts to tackle the problems.

        Later on, during the second decades of the country’s independence, there was a considerably aggravated food problem and a widening supply demand gap. This was the result of a gradual drift of the rural population to rural population to urban centres, either in search of white-collar jobs or attracted by the sheer fascination of the city life.

        The Nigerian Agricultural co-operative Bank limited is one of the federal government parastatals,  which came into being in 1973, [Obayunwana, 2001).

        Before the year 1978, it was known simply as Nigerian Agricultural Bank (NAB). In this year 1978, the name was changed to Nigerian Agricultural co-operative bank (NACB) to reflect the recognition accorded the co-operatives as viable organs with the responsibility of providing supervised agricultural credit to Nigerian farmers. It had spear headed the course of sustained agricultural development in Nigeria through its identification and financing of viable agricultural projects. It does this through a well-organized supervised agricultural credit system. NACB has its partners in progress with the Nigerian farmers who are the beneficiary of its credit facilities [Helm, 2002).

        Nigerian Agricultural and co-operative Bank came into existence to solve the financial problems that farmers faced after the civil war. At this time commercial Banking institutions were reluctant to lend money for Agricultural production and development. They argued that agricultural production has long gestation periods, and so referred to construction and oil industries with less risks, short gestation period and were returned to capital faster. This attitude of commercial banking frustrated the effort of our farmers who needed supply of capital and cash for farm production and exposed them to the whims and caprices of shylock moneylenders. These moneylenders charge very high interest rates ranging between 100 to 200 percent Per annum, [Ogunfowora 1993). Where one was lucky with any of the banks he could obtain loan at equally high interest rate. The NACB then came into the scene to provide the much-needed agricultural credit at relatively low interest rates. This bank formulates projects, gives credits in both cash and kind, implements, monitors and supervises the agricultural projects it sponsors, Nwoko (2001). To motivate her beneficiaries and guarantee the successful implementation of the project it finances, the bank encourages equity participation of its clients in the projects. It thus makes partners in progress. The activities of the bank are geared towards improving the income and welfare of farmers, promoting rural development as well as increasing the Nations out put of food and fibres, as well as cash crops to meet the needs of a rapidly increasing population. Its role summarily is to deliver credit to the agricultural sector of the economy through the provision of loans to individual farmers, cooperative organizations, limited liability companies, states and federal government agencies, Mokezie, (1994). It further provides a guarantee for viable agricultural and agro allied ventures to enable them raise capital either locally or form abroad. In order to ensure effective coverage of the federation and provision of adequate credit to farmers, NACB serves the nation through the operation of a four-tier structure of organization. At the apex is the head office in Kaduna. Under the head office, there are Branch offices; Anambra State is one of them. There are about three zonal offices in Anambra state and they include Awka zone, Onitsha zone and Nnewi-zone that take care of twenty-one local government areas called the Agricultural supervised credits Areas  (ASCA).

The activities of these ASCA offices include the following:-

  • Identifying the grass root beneficiaries for small Holder scheme, investment loan scheme, special projects loans scheme
  • Help in disbursing the loans to the grass root beneficiaries efficiently. Performing the extension activities in the rural areas and monitoring of the on going projects in the area.
  • Finally help to recover the loans granted to the beneficiaries of these goals, the Bank is committed to ameliorating suffering of millions of our farmers for whom it is too costly and risky to travel long distance from rural areas before they could reach any agricultural credit assistance.

        According Jekayinfa (1981), the Nigerian Agricultural cooperative Bank has two types of objectives. They are short term and long-term objectives.

        The long-term objective comprises;

  1. To grant loans for agricultural production including horticulture, poultry, farming, pig breeding and for purposes of storage, distribution and marketing connected with such production to any state, group of state or any institution for on lending to any farmer, group of farmers or body corporate provided repayment of the loans is guaranteed.
  2. To grant direct loans to individual farmers, cooperative societies or other bodies provided the scheme for which the loans requested are viable and there is adequate security to cover the loans.
  3. To do all such things as may be deemed incidental or conductive to the attainment of the above objectives.

In the short-term objectives, the Nigerian Agricultural cooperative Bank is to create a viable agricultural banking institution that will assist in the implementation of its long-term objectives, which is to enhance the level and quality of agricultural production.

        The bank has two sources of fund

  1. The local source.
  2. The international source.

On the domestic front, it obtains funds from the central Bank and the federal government apart from equity participation; the federal government usually makes a yearly statutory allocation to the bank in form of loan for credit delivery purposes. There are also the loans inform of short falls from commercial and merchant banks which are passed to Nigerian Agricultural and co-operative Bank (NACB) by the central Bank as loans, from the international capital market, the Bank borrowed from the world Bank group, African Development Bank, Economic Community of West African States (ECOWAS), European investment Bank (EIB) and International fund for Agricultural Development (IFAD)

Statement of problem

        There has been a question as to what constituted the roles of the co-operative bank especially the Nigerian Agricultural development in Anambra State; this study tends to assess the performance of the bank in order to ascertain whether it is fulfilling the objectives of its establishment.

        The federal government on March 6th, 1973 to finance and improve agricultural activities establishes the Nigerian Agricultural co-operative Bank. The performance of NACB in Idemili-south local government area of Anambra state has not been assessed since the inception or the programme was established in the stated local government. The farmers lack information on how to borrow from the bank and also to improve the activities of the programme, it was therefore necessary to assess the performance of the bank in other to ascertain whether it is fulfilling the objectives of its establishment  and means of improving it. This study will help to improve the programme.

Purpose of the Study

        The general purpose of this work is to assess the performance of Nigerian Agricultural cooperative Bank in idemili-South local government area in Anambra state. To ascertain if the bank is being achieved

        Specifically, this study sought to;

  1. determine the extent NACB provides loans for agricultural production
  2. find out other farm inputs supplied by NACB to farmers
  3. determine how farmers make use of the farm inputs from NACB
  4. determine constraints on the achievement of objective of the Bank.

Significance of the Study

        The study will be of immense help to both lending institution, farmers, young farmers and the public in general. The lending institution will use the information to ascertain and tackle the financial needs of the farmers and map out efficient strategy for loan disbursement and its recovery. As the farmers make use of the information, they are better equipped and become more aware on how to tackle the problems of their financial needs on when, where and how to obtain loans from lending institution. On the other hand, the young farmers (Students) absorb the information, which will help them in their research work; also it creates awareness on roles of the lending institution that serves as a guide for planning and execution of agricultural projects. To the public in general, the information is of immense help for those that need, want, desire to venture into agricultural business and can profit by it. It will also serve as a guide for proper, effective and efficient management of Agricultural ventures or business.


  1. To what extent has NACB provided loans for agricultural production?
  2. What are other farms inputs supplied by NACB to farmers?
  3. How do farmers make use of the farm inputs supplied by NACB?
  4. What are the constraints on the achievements of objectives of NACB?

Scope of the Study

The study was limited to the assessment of the role of Nigerian

Agricultural cooperative Bank in Agricultural Development of

Idemili-South local government area of Anambra State.

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