Loan administration is one of the external mean of financing many
sector of the economy especially the agricultural sector. This is due to
the fact that the agricultural sector is the major source of the food
production and supply in the country. This loan is been administered
through the financial institution established by the federal government
of Nigeria. It (loan administration) is been introduced so as to help
rural farmers and small-scale business financially in their various
businesses. This enhances and increases the agricultural productivity.
Loan administration in the financial institution is also one of the
elements that determine the extent of economic growth and development in
the country. Financial institution in 1990"s do not properly administer
their fund to the major sector of the economy which is the agricultural
sector and this led to the importation of food to the Nigeria making
the country so much dependent on other country for food. Thus the
agricultural sector could not boast of food production due to the fact
that it was not adequately financed. In Nigeria, up to 75% of its
production engage in agriculture which is the major source of food
supply in the country and most of them are poor and rural farmers which
have limited fund to produce the input and technological required in
carrying out their agricultural business. This lack of fund lead to
reduction in the food supply in the country and at the same time retard
economic growth and development. Therefore, agricultural sector need to
be adequately funded through the use of loan administration so that the
economy can boast of being independent of other countries and also can
develop.
Do to the problem of lack of capital experience in the agriculture
sector; especially in the rural farmers and small-scale traders, the
federal government of Nigeria took a major concern on the issue of loan
administration to enhance development in the country's economy through
financial institution. This led to the establishment of the Nigeria
agricultural co-operatives and rural development bank (NACRDB), family
economic advancement programme (FEAP), the Nigeria agricultural
cooperative and rural development bank (NACRDB). This establish in
January 200 but was dually confirmed by the federal executive council of
Nigeria in November 200. the bank is been supervised by the federal
ministry of agriculture.
