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MICROFINANCE CREDIT AND MICRO ENTERPRISE DEVELOPMENT IN THE AGRICULTURAL SUB-SECTOR OF THE NIGERIAN ECONOMY
Abstract
This study seeks to examine the relevance of micro financing credit loans to Agri-business in Lagos State, Nigeria – the development of Agricultural sub-sector centering the attention to the contribution of the institutions involved in the provision of these credits.It makes a critical review of the performance of microfinance institutions in Nigeria, based on a survey of the Agricultural Credit Guarantee Scheme Fund (a microfinance scheme established to boost the agricultural sub-sector of Nigeria). The study examines the scheme – the institutions involved and analyses the performance using the outreach paradigm viathe mixed approach research techniques – qualitative and quantitative research methods. In analyzing the outreach performance, the study evaluates the extent to which the scheme is fulfilling its objectives. Questionnaires were distributed to farmers inLagos state. The data collected were analyzed using simple percentage presented in tables and further analyzed using the chi-square method. Findings of the secondary data established from the Central Bank of Nigeria, indicates that the operation of the ACGSF though not stable has grown over the years, driven largely by expanding agricultural sector activities. The study reveals that the process of obtaining funds from the scheme is stressful and needs to be simplified. It also reveals that there is the urgent need to approve and implement a policy framework that would regulate and standardize micro finance operations, accessing medium to long term sustainable commercial sources of funds and increase mobilization of savings and shifting a good proportion of credit portfolio to the promotion of the real sector activities, especially agriculture.It is significant that Nigerian microfinance credit must be efficiently employed.
Keywords: Microfinance banks, credit, agricultural sub-sector, challenges