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STATISTICAL ANALYSIS OF THE ROLE OF MICRO-FINANCE BANK IN AGRICULTURAL DEVELOPMENT

ABSTRACT

The study was undertaken in statistical analysis of the role micro-finances bank in agricultural development with the aim of establishing the role of micro-finance banks. Loans to peasant farmers in conjunction with the crop production. Variance of one-way ANOVA (complete Randomized Design) and time series analysis was used in the analysis of the research work. The research work will help to enlighten farmers on the causes of low agricultural productivity. The work utilized the secondary data, that is on percentage loans given by bank and the corresponding crop production within the study period. The analysis of variance (ANOVA) carried out shows that we reject null hypothesis (H0) since Fcal (5.43) > Ftab (3.20) and concluded that there is significant different in the loan obtained by individual from three selected banks, and for that of the amount of the crop production the analysis carried out shows that we accept (H0). Since Fcal (0.27) < (1.32), and conclude that there is no significant difference in amount of money distributed to different farm products. With the above finding the project work recommends that farmers in Nasarawa State Micro-finance banks were rational during the study period by responding positively to Micro-finance banks since these farmers have shown that given such loan will increase their product in rate, therefore the microfinance banks should also remove all restrictive measures such as rural farmers should have access to micro-finance banks loan.

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF THE STUDY

The project work is based on the statistical analysis of the role of microfinance bank in agricultural development in Nasarawa state. A study cover three selected microfinance banks, microfinance bank has played a vital role in the financing of various agricultural development programme. According to Schreiver and Columbet( 2001) define microfinance as a development tools used to create access for the economically active poor to financial service. Nasarawa state is one of the seven state that make the north central geo-political zone and the north central part of Nigeria, it has an inter-state boundary with Kaduna state to the north federal capital territory Abuja to the west Kogi and Benue  state to the south Taraba and plateau state to the east its capital Lafia.

Nasarawa state was originally part of northern region in the three region structure of 1954. In 1967 with the creation of 12 federal states by General Yakubu Gowon’s military government it’s become part of the Benue Plateau State. The 1976 military government of General Muritala Muhammed create 19 states out of the existing 12 federal states and Nasarawa state was made a component of plateau state 1996 the military government of General Sani Abacha divided plateau state into the present plateau state and Nasarawa state. Many cities and towns Lafia (Capital City) Akwanga, Dorna, Karu, Keffi, Nasarawa, Nasarawa-Eggonand waund a land mass, location and population.

Nasarawa state covers an area of 28, 735sq kilometers, it has a population of 1,863,275 (2006 census figures) with a population density of 65 people/sqkm its population make up 1.3% of Nigeria’s total population. Original inhabitants and settlers early settlers of Nasarawa State include the Magili people. The state takes its name from Nasarawa one of its main town administrative structures:

(Administrative Military) October 1996-August 1998. Baba Marde Administrator (administrator military) August 1998-May 1999 AbdullahiAdamu(Governor Civilianmay (People Democratic Party) 29 May  1999 May 2007 AliyuDoma (Governor-civilian (People Democratic Party) May 2007- may 2011 Umar TankoAlmakura (governor-civilian (congress for progressive change) may 2011-present.

Nasarawa state is almost entirely wood land savannah and tall grass savannah agricultures is very important and the main occupation of the people of the animal cassava, yam, rice, corn, genie corn, beans, soya beans and millet are the major crops grown. Animal husbandry is a significant commercial activities minerals form in the state include state coals loonier, zinc, copper, columbite barite and aquamarine.

Education: Nasarawa state has one federal university Lafia, one state university Nasarawa state University Keffi and a number of Polytechnics including college of Agriculture-Lafia the Federal Polytechnic Lafia.

Tourism and Recreation: Tourism and recreation features in Nasarawa state include farm, Ruwa water fall Eggon Hills and Caves PapeRuwa Lake, Kenna salt village, Doma Dam area Rock and Alain warm springs.

MICROFINANCE BANK: Microfinance beings with one man and one village Gramme Bank was the First Microfinance Bank and it was established by Muhammed Yunusa a native of Banglades in business owners were forced to repay much of their profit to loan issuers in (1976) Yunusa extended his first microfinance loan from his personal account to a group of woman in a Bangladeshi village, and the concept of microfinance leading grow from there his intensions were not to gorge the borrowers, but instead to provide them with reasonable finding on terms that would not cripple them financially but instead foster growth. Microfinance loans are designed for providing financing to the most under privileged region in the world including sub-Saharan Africa and the democratic republic of Georgia where pockets of the population might otherwise have no access to any sort of banking institution. In addition to small loans individuals again support, including education and training for personal development in addition to savings and insurance products the purpose is to break the cycle of property in a region loans for woman living in poverty condition are woman, according to opportunity international a US-based non-profit organization that works with microfinance lenders, A woman is less likely to receive formal education, business training, or a prominent role in society in an under-development region and without proper financial support may never overcome these obstacles.

Agricultural according to T.Steil Newman (1823) is a thing of law as such again any operation or revolution that is agricultural oriented which fails to rural farmers is certainly heading to failure so if the microfinance bank all over, they are to direct their services and credits to the business sectors and the so called rich individual in the cities while the rural duelers (farmers) that matters are left out we must have it at the back of our minds that we are not helping the agricultural future of our economy but agricultural has been an important sector in Nigeria economy. A well-organized and productive agriculture sector is essential for the achievement of a sound economic and social development which the nation deserve agricultural contributed about 55.2%to the Growth Domestic Product (G.D.P) of Nigeria in the 1960 but this contribution declines to about 30.3% in 1970 this sharp decline has been attributed to a numbers of factors including the discovering of petroleum the civil war and the Saharan drought in spite of the difficulties agriculture face sit still provides the bulk of food they eat in this country raw materials for many Nigeria and foreign exchange from export of cash crops the impact of those contribution of the wellbeing of economy is sufficient to justify productivity which federal and state government give to agricultural development of Nasarawa State in Nigeria is lack of financial resources for the small farmers they need these in order to purchase many of the input that are now available as well as to increase their scale of operation one way to solve this problem is to make loan available to them. Agricultural loan can be defined as the capacity to borrow an agricultural capital either in each of kind for the purpose of expending agricultural production making or other agricultural activities.

1.2 STATEMENT OF THE PROBLEM

Despite that microfinance banks loans gives out the farmers and the quantity production of the selected crops agricultural activities carried out at various levels and field, are still facing a lot of problems, these problems affects the production of foods, poultry and other agricultural activities, there are numbers of constraints, facing agricultural develop in Nasarawa knowing all these problems above the researcher intends to know if the loan given to the farmers are used properly, and to know if there is agricultural development in Nasarawa State.

1.3 AIMS AND OBJECTIVES OF THE STUDY

The aim of this researcher work is to know if the loan given to the farmers leads to increase in agricultural development in order to reduces the rate of imported products and also know if there will be an increase in the number of people who will collect loan in the nearest future. With the following objectives:

1.  To compare the amount of production of the selected crops.

2.  Determine the trend of allocation of loans by the microfinance banks.

3.  Forecast for the numbers of farmers to benefit from the loan.

4. To forecast the amount allocation to various crops

To know whether is significance or not.

1.4 SIGNIFICANCE OF THE STUDY

The research work will be important to both the microfinance banks farmers they will be able to identify banks their fault and view the point of correction. It is also giving to be important to the society for implementation of loans and planning purpose. In this case the society or community will be able to determine the other farmer’s responses towards this economic contribution or in controls by creating more microfinance banks In the state having absolute control on their activities and policy making as far as agricultural activities is concerned.

1.5 DELIMITATION OF THE STUDY

This research work is restricted to three selected microfinance banks in Nasarawa State from 2000-2015.

1.6 RESEARCH QUESTION

To direct the researcher towards the successful completion of this project works the following is setup.

1.7     LIMITATION OF THE STUDY

The data used in the research work is restricted only on the records of loan awarded by micro finance bank as the case, and this limitation is due to shortage of micro finance banks within the study area. Other limitations of the study are south of inches run into the cause of putting the data and materials together such as financial and time constraints.

1.8     DEFINITION OF TERMS

Loans: Is the amount of money lead to people from the bank with the mood of returning at a specific period of time with interest in the capital given.

Liability: This is outside clients on the bank assets.

Assets: These are the resource of banks, it can be either fixed or currents assets.

Bank: Is a financial establishment that invests money deposited by the customer.

Population: This is the collection of entity from which decision and conclusion are to be made drawn a sample.

Sample: Is apart of the population where by study in order to make inference to the entire population.

Treatment: Is any variable whose effect ones desire to measures

Experiment: Is any operation or action that the result cannot be predicted with certainly.

Experiment unit: This is the smallest entity which the treatment is applied.

Analysis of variance (ANOVA): is a statistical models used to analyze the difference between group means and their associated procedure (such as “variation among and between groups), development by R.A fisher. In the ANOVA settings the observed variance in a particular clearable is partitioned in the components attributes to different sources of variation. In it simple form, ANOVA provides a statistical test of whether or not the means of several group are equal and therefore generalizes the t-test to more than two groups. As joining multiple two-sample T-Tests would result in increased chance of committing a statistical type 1 error. ANOVA are useful in comparing (testing) three or more means (group or variable) for statistical significant. It can also be used as an exploratory tool to explain observation.

Regression analysis: Is a statistical process for estimating relationship among variable, it includes many techniques for moldering and analyzing several variation.

Multiple progression analysis: Is a statistical tool used to drive the value of criticism from several other independent or predictor, variable. It is the simultaneous combination of multiple factors to assess how and to what extent they affect a certain outcome. The dependent variation Y depends on many independent variable X1, X2,—X.