THE EFFECT OF AGRICULTURAL LOAN ON FARMING ACTIVITIES IN NIGERIA

ABSTRACT: This study was carried out to investigate the effect of agricultural loan on farming activities in Nigeria a case study of Ohaofia local government area of Abia state. Specifically, the study was aimed atknowing the difficulties encountered by those farmers in assessing these loans, know which institutions have been really supportive in assisting the farmers to increase productivity, know if increased assistance would mean increase in employment and productivity, and know if there is a relationship between agricultural credit or loan and the level of productivity in Nigeria. We are also interested in knowing the nature of this relationship if any. The study employed the exploratory research design and utilized secondary data extracted from the published annual reports of the commercial bank used for the study. With the secondary data collected, returns on assets and equity for the relevant years were computed. The secondary source used in conducting this research was based extensively on documentary sources which are textbooks, journals, articles, newspaper articles, paper presentations etc. also it involved Publications of Central Bank of Nigeria and monetary institutions such as CBN bulletins, presentations, slides, commercial bank bulletins etc. The findings revealed that there is no significant relationship between agricultural loan system and employment level in Nigeria. Also, the findings revealed that there is significant relationship between agricultural loan system and agricultural output in Nigeria. The study therefore recommended that more emphasis should be placed on the availability of loans to farmers as this would help expand the productive capacity of Nigeria. Also, loan should be disbursed to farmers with minimum delay, since respondents identified timely disbursement of loans as a way of an effective implementation. This, when done on time will enable framers meet their farm needs in the right season and increase their farm output. Moreso, an intensive cooperative and credit education should be imparted to those using credit before being entrusted with it. They should be adequately supported to provide the necessary training to farmers, school leavers and credit managers in the administration of credit and better farming practices.