An Analysis Of Loan Default In Nigeria Agricultural Co-Operative And Rural Development (A Case Study Of Nacrdb Nkpor Anambra State)
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First of all, I dedicate this work to the Almighty God for His infinite mercy to the possibility of this project and for His guidance and protection towards me during this my academic pursuit.
I also dedicate this work to my lovely parents Mr. & Mrs. B.C.N. Duru for the financial support and encouragement to ensuring that I have a sound academic up bring in life.
I acknowledge my family members for their love and support throughout my staying in school.
Also, I acknowledge the effort of my supervisor (Mr. Mike Okonkwo) for correcting and guiding me throughout this project writing.
My great thanks goes to the staff and members NACRDB (Nigeria Agricultural Co-operative and Rural Development Bank) Nkpor, for assisting me in my research work.
Thank you all.
The research analyzed the loan default in Nigeria agricultural co-operative and rural development bank (NACRDB). This bank finances all forms of co-operative societies and small-scale industries. This aimed at knowing the extent of NACRDB loan administration programme and the extent it has accomplished the objective of its establishment. Most co-operative societies are not aware of the NACRDB loan scheme.
Improper loan disbursement and low supervision has contributed not render the necessary assistance to the loaned in terms of advice and training. These are the result from questionnaires.
Based on the finding, the following recommendations were made:NACRDB should ensure efficient disbursement of loan, they should create awareness for their loan scheme, they should arrange proper programme for the loaned appropriate supervision of the loan to avoid loan diversion if necessary, they should assess aspire to give the loaned both the business and technical advice needed. All these are aimed at efficiency to reduce the rate of loan default.
Table Of Content
- Approval page ii
- Dedication iii
- Acknowledgement iv
- Abstract vi
- Table of content viii
- 1.0 Introduction 1
- 1.1 Background of the Study 1
- 1.2 Statement of the Study 3
- 1.3 Objective of the Study 5
- 1.4 Research Questions 7
- 1.5 Significance of the Study 5
- 1.6 Scope of the study 8
- 1.7 Limitation of the study 9
- 1.8 Definition of terms 10
- 2.0 Literature review 12
- 2.1 The Meaning of Co-operative Society 12
- 2.2 The objective of the NACRDB13
- 2.3 The organizational structure of NACRDB 15
- 2.4 Types of loan issued by NACRDB 18
- 2.5 Procedures for securing loans recovery 23
- 2.6 Causes of loan default 36
- 3.0 Research Methodology 42
- 3.1 Types and sources of data 42
- 3.2 Research design 43
- 3. 3 Population and sample size 44
- 3.4 Sampling Techniques 45
- 3.5 Validity and reliability of measuring instrument 45
- 3.6 Method of data analysis 46
- 4.0 Data presentation and analysis 47
- 4.1 Presentation of data tables 48
- 5.0 Summary of findings, conclusion and recommendations 67
- 5.1 Findings 68
- 5.2 Conclusion 69
- 5.3 Recommendation 70
- References 72
- Appendix 74
1.1 Background Of The Study
In 2001 Nigeria in the quest to offset debt crises of economic problem mapped out specialized banks primarily set to entrance investment in agriculture and finance macro and micro credit especially within the rural communities. Such banks are Nigerian agricultural co-operative and rural bank (NACRDB) development banks, industrial bank, and mortgage banks. They grant loans to small holders and large investment holders. These banks were designed as an avenue to get in contact with numerous farmers and business investors at the grass roots level. Nigerian agricultural co-operative and rural development bank (NACRDB) is aimed at financing basically agricultural co-operative and other co-operative societies in the small scale business.
The research for the recovery of loans from clients include:lack of trained and experienced personnel in agricultural financing and loan administration on most of the commercial and merchant banks default in loan repayment resulting from poor project appraisal or management as well as outright unwillingness to repay by some borrowers, also problem related to settlement of loans is caused by the bank to file claims in accordance with procedure and passion stipulated by the banks, improper loan disbursement and poor supervision. Another problem could be caused by delay in approval due to low capital base on the banks as a result of inflation in the economic. This delay may lead to misappropriation of funds which might eventually lead to losses.
The observed trend is that Nigerian Agricultural Co-operative and Rural Development Banks and other financial institutions are experiencing a high level of loan losses each year due to the shortcomings indicated earlier. This is the obtaining at an insight into the problem of loan recovery and offering adequate and requisite suggestion.
This is the main reason why analysis of the loan default in Nigeria agriculture Co-operative and rural development banks (NACRDB) with the view of obtaining an insight in to the problem of loan recovery and offering adequate and requisite suggestion.
1.2 Statement Of The Problems
Special banks have been set up in the country to advance loan and credit for development purpose. Incidentally these banks have always find it difficult in recovering the advanced loans especially NACRDB which is the focal point of study. In problem of credit recovery by these banks, it can be seen to range from lack of collateral. Commitment, lack of trained and experienced personnel in agricultural financing and loan administration, to the default in loan repayment negotiation, poor project appraisal or poor project management, as well as simple uncollingness of the borrower to repay borrowed money, equally seen as a problem towards loan recovery is whether the bank supervised the loan given to the borrowers, the inadequacy of the funds guaranteed in an inflating economic as well as low capital base ion the funds and finally difficulties associated with the deregulation of the financial market and distress of the banking industries in “go” which reduced the interest to participate in NAERDB’s operations, against these established shortcomings, the work will methodically study these areas of shortcoming and suggest the solutions to the problem, for future guide against credit and loan defaults by NACRDB to the prospective customers.
1.3 Objectives Of The Study
The general objective of this study is to analyse loan default in Nigerian Agricultural Co-operative and Rural Development Bank (NACRDB).
The specific on objective of the study include:
- To find whether or not co-operative societies secure loan from NACRDB.
- To determine the condition for such loans.
- To determine and examine the factors responsible for the loan default.
- To determine and find out the problems that affect the organization in loan administration.
- To find out the credit burden of such loan.
1.4. Significance Of The Study
This study well expose the ways by which loan default in co-operative movement. It is very big significant part from stimulating and paving way for further studying of this area, it will also provide a clear standing of these defaults and growth affecting NACRDB. And it will also expose how good management loan can bring about greater happiness among co-operative co-operators, co-operative bodies individuals, all loaned and NACRDB Nkpor Zone.
This work has emanated from the performance of the co-operative credit institutions, especially the NACRDB Nigeria Ltd. Its purpose is to help provide a true and objective position of NACRDB Nigers Ltd. In that process, the following will be critically looked at:
- There findings will help enable us to appreciate the contributors the NACRDB has made so far in the general economic and industrial development of Nigeria especially as regards in financing of co-operative societies.
- It will also guide co-operative societies in tackling the various credit financing problems facing them and make full utilization NACRDB.
- The study will also help those who may have need for further research on the financing of co-operative societies by development banks.
- The findings will also help to make recommendation and suggestions for further improvement of the present situation.
- Lastly, the work will be useful in addition to the existing research work, in the area of loan disbursement and recovery in our country and hence will serve as a reference to further researchers.
1.5 Research Questions
- To what extent are loan disbursed to Agricultural Co-operative Societies by NACRDB in Nigeria?
- How regular is the loan disbursed to Agricultural Co-operative Societies in Nigeria?
- What are the interest rates on loans disbursed to Agricultural Co-operative Societies in Nigeria?
- At what rate do Agricultural Co-operative Societies repay their loans to NACRDB?
- What is the extent of loan default by Agricultural Co-operative Societies in Nigeria?
1.6 Scope Of The Study
This study covers the operations of NACRDB Nkpor Zonal Office with regards to its loan disbursement and recovery. It looks at the operations of the banks in granting financial assistance to co-operative societies who are the users of fund to ensure their investment. It also talk about how the NACRDB will uplifted to avoid failure in the society, with this it will enable the co-operative society to grow higher than expected with the help of the financial assistance.
1.7 Limitation Of The Study
Apart from these, NACRDB like any other organization has a secret nature of handling its official document. Hence they could not provide enough data as required by the researcher for instance, the staff of NACRDB could not let out any unpublished data that is newly documented with regards to their operation. Therefore there is no doubt that it has some limiting impact on collecting a sufficient data because time and money were the greatest problem encountered in this research work as a student. The research (i) have to make use of the little information provided by the NACRDB. Also there is this difficulty in obtaining enough information from individual borrowers on the amount of loan given to them each year.
1.8 Definition Of Terms
For the purpose of this study, it is useful to make clear meanings at some major terms used specially for the purpose of the study such as terms are as follows:
Loan Able Funds:
Loan able funds are money available for lending in financial market, the loan able fund theory holds that the rate of interest is determined by the force/rate of demand and supply of loan able funds in the capital market,
This means the registrar of Co-operative Societies appointed under an appropriate section of co-operative law of any state or country and he can also be a person who is exercising such power or a registrar, as may have conferred on him under Co-operative law.
It is a portion of surplus value which an industrialist transfers to the bank or finance house as payment for using its loan.
This is that which is meant to enable the beneficence to generate additional income which will in the long run time to attain reliance.
Ability to verify oneself for survival and continuous development rather than relying on others.
Conveyance of property like lands and buildings to a creditor as security for acquiring loans.
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How to nail it on the head during your project defence
You are through with writing that project. Now what?
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Use, Your Gestures:
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Prepare For The Questions:
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The structure of a good project work
Undergraduate projects in Nigeria is a prerequisite for graduation amongst Nigerian tertiary students who will which to obtain bachelors degree in their respective courses of study such as accounting, banking and finance, business administration and a host of others. Writing an undergraduate project in Nigeria for final year students entails a lot both financially and otherwise. Being able to develop any final year project depends on getting a researchable topic whether it is Accounting Undergraduate project topics, Banking and Finance research topics or banking and finance project topics and materials and it all requires diligent hard work of students who are willing to develop best undergraduate projects in Nigeria and graduate in flying colors.
A typical Undergraduate project in Nigerian tertiary institutions can be said to be divided into five or six chapters depending on the format of the school and course of study which are
The introduction of an undergraduate project states the main research problem and research argument. What precisely the study is all about and why it is important. It looks at the originality of the research work and how it will fill the gap in other studies. Justification for a research undergraduate topic should not be lengthy before it has been explicitly stated.
Below are the contents in chapter one of an undergraduate research project which includes;
- Background of the study,
- Statement of the problem,
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- The research questions,
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- Limitations of the study and
- Operational definition of terms.
2. Literature review
Literature review of any undergraduate research work, be it business administration project topics or Economics project topics just to mention a few is very critical to securing a high grade in one’s project work. The literature review of a research process uncovers what other writers have written about the student’s topic. A student’s undergraduate research work should include a discussion or review of what is known about the subject and how that knowledge was acquired. The review could conclude with a brief summary of the literature and its implications. The contents of the literature review are the theoretical review, conceptual framework, empirical review and summary of literature review.
3. Research Methodology
This section includes a description of the research methods used in the undergraduate research work such as the sample size, data collection methods, measurement instruments, research data analysis procedures and the population from which the sample was selected. This section also describes the method used in selecting the sample or samples, validation and reliability of the instruments used in the research work. There are different research statistical techniques used in undergraduate research work such as SPSS, e-views etc.
4. Results & Discussion
This section presents and discusses the data analysis results used in an undergraduate research work, the results of each analysis is being summarized, tabulated, and then discussed for each research question. Then for each research hypothesis, the statistical test of significance selected and applied to the data is briefly described, followed by a statement indicating whether the hypothesis was supported or not supported. In presenting the result analyses/summary in an undergraduate project tables and figures and or graph are used to add clarity to the presentation.
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This section summarizes the findings of the study in an easy to understand manner. It also explains the practical implications of those findings, and points to recommended directions for future research in that area.
This is where every source cited in the undergraduate research work is being included. Every undergraduate research work must be properly referenced for its authenticity.
Choosing A Good Project / Research Topic
Students in Nigerian universities these days wish to choose a very simple project topic/material. There is no issue choosing a simple project topic; the only problem is your ability to choose a good project or research topic that your supervisor will easily approve for you.
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There are some project topic that are not reject-able; for instance in Nigeria of today; what do you think is the major issue on ground now?
If a project student can choose or craft a topic on the effect of dollar increment on the economy of Nigeria. Such project topic will be very interesting to write on.
Now what are the qualities of a good project topic?
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What do I mean by variable?
Well I am deriving my point from the area of ; the variables here are those main words in the project topic.
Like the above project topic; the effect of dollar increment on the economy of Nigeria. You can see the main variables that really define this project topic are:dollar, increment and economy.
Before you present your topic to your project supervisor, first of all understand your project topic, and then secondly try to do some research for your topic to see if at least you can get up to 60% of what you need to write the complete project.
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