Prospects and challenges of agricultural financing in Nigeria: A review

Abstract

This paper examined the prospects and challenges of agricultural financing in Nigeria. It was observed that agricultural financing is all about providing services to the farmers who are traditionally not served by the conventional financial institutions. Agricultural financing holds a lot of prospects for Nigerians especially the poor as it will enable them develop their skills, engage in production and many others. Among the problems identified are access to banking services in rural communities, lack of acceptable collateral/ security, perceived high agricultural risk, lack of access to credit information, high cost of credit administration, access to market, infrastructural challenges and subsistence nature of farming. The various prospects highlighted include; economic empowerment of farmers, poverty reduction, gains from international trade, employment generations, rural development, skill development, new innovations, effective utilization of local resources and output expansion. Consequent upon the problems noted, the paper recommends that the supervisory authorities should enforce standards so as to address the issue of poor management of funds meant for credit disbursement.