– Influence of Financial Institutions on Agriculture Development –
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ABSTRACT
The Study was carried out on the influence of financial institutions on Agricultural development in Akwa Ibom State. Four hypotheses were formulated from four research questions to guide the study.
One hundred and twenty farmers were drawn from a population of 2353 farmers that are registered with Akwa Ibom State Agriculture Development Programme agency covering the four clans in Uyo Local Government Area using multistage sampling technique and administered with a structured questionnaire. A reliability coefficient index of 82 was obtained.
The statistical tools used for Data analysis were mean, standard deviation and t-test. The result among others showed that there significant influence of loan provision on agricultural development.
The researcher recommendation among others that Agricultural Workshops and seminars should be organized regularly to keep farmers updated with lasts information on research finding.
INTRODUCTION
1.1 Background of the Study
Financial institutions are critical for agricultural development of any society. According to Investopedia dictionary a financial, a financial institution is defined as an establishment that focuses on dealing with financial transactions such as investments, loans and deposits. (Diller 2013).
Conventionally, financial institution is composed of organizations such as banks trust companies, insurance companies and investment dealers.
The above definition explains the importance of financial institutions in the agricultural development of any society as no sector of an economy can function effectively without funding.
Ugwanyi(1999) defined agricultural financing as the sourcing of fund and making it available for agricultural purpose. Agricultural financing simply means the acquisition and utilization of funds for agricultural purpose.
Agricultural financing is mainly a long term financing (that is capital structure) that aims at inducing agricultural-led growth and development in an economy.
It is essentially a development strategy in a variety of ways: it promotes agricultural investment and adoption of technology necessary to spur economic development.
A financial institution such as Bank provides loan which helps a farmer in increasing their agricultural productivity. Nigerian is endowed with natural resources, large fertile farmland, wide range crops and abundant species of livestock, etc. despite its abundant natural resource, it is faced with poor food situation.
The problem of feeding and provision of raw materials for industries is increasing by the day. Before the discovery of oil, agriculture was the main sector of the economy.
It was also the most driven sector of the nation’s economy in Nigeria agriculture accounts for one-third of gross domestic product (GDP) and generate two third employment opportunity for our labor force (Oyeyinka 2002).
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