Extents of sharp practices in credit allocation and utilization among staff and beneficiaries of the Bank of Agriculture in Oyo State

Abstract

One of the strategies employed in the implementation of Agricultural Transformation Agenda (ATA) is to harness the roles of major stakeholders along the nodes of agricultural value chain. Pivotal among these are the financial institutions, one of which is the Bank of Agriculture (BOA). However, financial institutions are not immune to the widespread incidence of sharp practices (SPs) and corruption that have crumbled similar laudable programmes. Thus,the extent of SPs in credit allocation and utilization among staff and beneficiaries of BOAin Oyo State was examined.Simple random sampling technique was employed to select 135 respondents comprising 110 beneficiaries and 25 officers of the BOA for the study from the total number of registered BOA beneficiaries and staff. Primary data were obtained through questionnaires and interview schedules and analysedusing descriptive statistics - frequencies and percentages.Of the beneficiaries, 39.7% and 52% of the credit officers were between the ages of 41 and 50 and 51.8% of the beneficiaries were livestock farmers. Credit diversion and breach of contractual agreement were major forms of SPs respondents engaged in. High rate of default as well as lateness in the disbursement of farm credit were major problems in credit allocation and utilization. In conclusion, most of the respondents had unfavourable perception towards SPs, showing that they know it is counter-productive. Ironically, they engaged in it. The study recommends appropriate mechanisms including thorough monitoring, reward and sanction should be used to curb the SPs.Keywords: Credit allocation and utilisation, Sharp practices, Bank of Agriculture.