The Challenge of Agricultural Financing in Nigeria: A Case for Community Banking System


The Community Banking System (CB) was established by a Federal Government Decree No. 46 of 1992 primarily to resolve the problem of credit flow to small scale farmers who wish to adopt improved packages. At the end of 1994, the Banks have been in operation for five years. The major objective of this study (which is mainly a library research) is to evaluate the contributions CB has made to agricultural financing in Nigeria and make appropriate recommendations on how the system can be sustained. The data used for the study are from various secondary sources including Newspapers, Annual reports and personal interaction with some of the Community banks (CBs). Result indicate that area covered by a bank branch has reduced to 245.95 km^2 as a result of the establishment of CB. Also, the number of persons served by a bank branch has reduced to 23,550. There have been increased funding of agriculture and the imbalance in the distribution of bank branches between the urban and rural areas have reduced considerably. A number of useful suggestions were put forward in order to sustained the system.

The Nigerian Journal of Agricultural Extension 12(1):17-25
Job Nmadu
Professor of Agricultural Economics and Dean, School of Agriculture and Agricultural Technology

Research interests are economic efficiencies of small scale farming and welfare effects of agricultural interventions.