(a) Explain the meaning of agricultural finance and agricultural credit. (b) Name six sources of agricultural credit available to the small-scale farmer (c) Mention six problems associated with agricultural credits.
Explanation
Agricultural finance is the act of acquisition and use of capital in agriculture. It deals with the supply and demand for funds in the agricultural sector of the economy while agricultural credit is a repayable loan given to farmers with or without interest to enable them carry out their farm operation more efficiently.
(b) Sources of agricultural credit available to the small-scale farmer are: (i) Agricultural Banks like Nigerian Agricultural and Cooperative Bank (N.A.C.B.). (ii) Supervised Agricultural credit schemes. (iii) Thrift and saving societies. (iv) Self financing or personal savings.(v) Money lender. (iv) Cooperatives societies. (c) Six problems associated with Agricultural credits are: (i) High interest rate. (ii) Lack of collateral security. (iii) Diversion of loan by .borrowers. (iv) Long gestation periods, especially for plantation crops (v) High incidence of loan defaulters. (vi) Difficulties in recovering loan