Agricultural Economics and Extension Project Topics

Impact of the Commercial Agriculture Credit Scheme on the Performance of Beneficiaries

Impact of the Commercial Agriculture Credit Scheme on the Performance of Beneficiaries.

Chapter One


The broad objective of this study was to analyze the impact of the commercial agriculture credit scheme (CACS) on the performance of the beneficiaries in Abia State, Nigeria. To achieve this, the specific objectives were to:

  1. describe the socioeconomic characteristics of the farmers
  2. Analyze the use of the loan by farmers
  3. Determine the impact of the scheme on the beneficiaries
  4. Determine the factors that influence the repayment performance of the borrowers
  5. determine the problems encountered by the farmers in the scheme and they could be solved.




Agricultural finance refers to the supply of and demands for funds in the agricultural sector. Generally agricultural finance can be defined as an economic study of borrowing funds by farmers, of the organization and operation of farm lending agencies, and of society’s interest in credit for agriculture (Reddy, Ram & Neelakanta, 2004). It can also be defined as the mobilization of resources at all levels for agriculture in order to increase production and productivity.

It plays the role of an effective engine for most agriculture based countries (ADB, 2000). Agricultural finance derives its role from the conception that agricultural development is a process that involves adoption of new and better agricultural practices by farmers (Nwosu, 2013). Most of these new practices have to be purchased but very few of the farmers have the financial resources to finance the purchases. Agricultural finance provides increased productivity, economic sustainability, poverty reduction, business opportunities institutional changes, innovation, incentives as well as growth (Adesina, 2006).

The main objectives of agricultural financing policies in Nigeria are to establish an effective system of sustainable agricultural financing schemes, programmes and institutions that could provide micro and macro credit facilities for the small medium and large scale producers, processors and marketers (CBN, 2007). Agricultural activities in Nigeria are usually financed through savings or credit. However, because of low savings prevalent in the country, credit is seen as a way out. Government at Federal, State and even local government levels has been making both direct and indirect efforts in order to facilitate agricultural financing through credit facilities (Nwosu, 2013).




Research design

The researcher used the descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought to a critical analysis of impact of the commercial agriculture credit scheme on the performance of beneficiaries.

Sources of data collection

Data were collected from two main sources namely:

(i)Primary source and

(ii)Secondary source

Primary source:                              

These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.

Secondary source:

These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.




Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey.  This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.


The data collected from the respondents were analyzed in tabular form with simple percentage for easy understanding.

A total of 133(one hundred and thirty three) questionnaires were distributed and 133 questionnaires were returned.




It is important to ascertain that the objective of this study was to have a critical analysis of impact of the commercial agriculture credit scheme on the performance of beneficiaries.
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations are made, which in the opinion of the researcher will be of benefit in addressing the challenges of Agricultural Credit Scheme.


This study aimed at having a critical analysis of impact of the commercial agriculture credit scheme on the performance of the beneficiary. The study developed five objectives to guide the study and the objectives were structured in such a way that it would capture: the socio-economic characteristics of the farmers, the use of the loan by the farmers, the impact of the scheme on beneficiaries output, factors that influence the repayment performance of the borrower and the problems encountered by the farmers in the scheme.
The result of the analysis showed that male farmers were more than female farmers in the study. Also, the study discovered that most of the respondents have household members of 5 and below. Most of the farmers in the study were aged 41 to 60 years while, tertiary education pulled the highest frequency in the highest education level of the respondent. On the other hand, 99.2 percent of the sampled farmers own bank account while, 66.8 percent of them were married. Furthermore, farmers who had just 5 years and below farming experience had the highest proportion of respondents while farmers with 10 hectares and below equally had the highest percentage of farmers sampled. In the same way, farmers with capital base of 10 Million Naira and below were most, just as farmers who need credit in their farm have the highest percentage of the respondent. More so, most use only personal savings as their only credit source, just as farmers who use human labour were more.


Based on the above findings pertaining to the objectives of the study the following conclusions are drawn.
This study looked at the impact of commercial agricultural credit scheme on the beneficiaries in Abia state of Nigeria. From the result of the analysis in this study and the summary of findings, the study concludes that, most of the farmers in the area were mostly male of the age bracket of 41 to 60 years and household size and highest education level of 5 and below and tertiary respectively. In the same way, the study discovered that most of the farmers in the area have bank account and requires credit for their farm activities. Also, most of the farmers in the area were married and most of them have farmed for 5 years and below even as most of them own farm size and capital base of 10 hectares and below and 10 million Naira and below respectively. Majority of the farmers in the area does not source for credit as personal savings was identified as their major source of credit and they most often use human labour for their production.


  • Abdulrasheed, A. & Etudaiye-Muhtar, F. (2010). Analysis of Credit Creation and Administration in Commercial Banks in Nigeria.
  • Abe, S.T. (1982). Nigerian farmers and their Finance Problems. Bullon Magazine, 7, 4.
  • Adebayo, O.O. & Adeola, R.G. (2008). Sources and uses of agricultural credit by small scale farmers in Surulere Government. Anthropologist, 10(4), 317 – 319.
  • Adegbite, D. A. (2009). Repayment Performance of Beneficiaries of Ogun State Agricultural and Multipurpose Credit Agency (OSAMCA) in Ogun State, Nigeria (2004 – 2007). American – European Journal of Sustainable Agriculture, 3(1), 117 – 125.
  • Adejobi, O. & Atobatele, J.T. (2008). An analysis of loan delinquency among small- scale farmers in Southwestern Nigeria: Application of Logit and Loan Performance Indices. East African Agricultural and forestry Journal, 74(3).
  • Adenuga, T.F. & Heidhules, (2000). Determinants of farm households access to informal credit in Lume District, central Ethiopia. African Review of Money – Finance and Banking.
  • Adesina, J.O. (2006). Development and the challenge of poverty. In J.O. Adesina & A.O. Grahan (Eds.). Africa and Development, challenges for the New Millennium. The NEPAD Debate.
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