EFFECTIVE ADMINISTRATION OF CREDITS IN CO-OPERATIVE CREDIT SOCIETIES IN ENUGU STATE. A CASE STUDY OF SELECTED CREDIT CO-OPERATIVE SOCIETIES IN ENUGU NORTH L.G.A

posted on November 27, 2019

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF STUDY

Agricultural credit in Nigeria dates back to the 1930s but organized credit to farmers did not start until 1972 when the Nigeria Agricultural and Cooperative Bank (NACB) was established.

The awareness of the serious decline in agricultural production was probably partly responsible for the establishment of the bank.

The NACB is not the only financial institution which provides agricultural credit. Prior to the establishment of NACB, agricultural credit scheme was operated by some agencies such as the Ministry of Agriculture’s Supervised Credit Scheme, Agricultural Credit Cooperative, cooperative thrift and loan scheme, farmer’s multi-purpose cooperative societies. Most of these institutions were not effective sources for strictly agricultural credit. There was a lot of evidence that creditors borrowed money for agriculture but diverted it to other ventures.

Again, credit was often extended to only favorites and scarcely to genuine small –scale farmers. Besides they could not meet the collateral and equity contribution requirement, a situation that compelled a significant proportion of the farmers to seek for other sources of credit.

According to Dachaba quoted from Cardoso, (1987) a survey carried out should that 58% of farming related borrowing was from family and friends, 24% from private money lenders, 15% from merchants and only 3% from financial institutional sources. However, while family and friends charged little or no interest. Organized credit facilities for Nigeria’s rural farming population would reduce the dependence on sources other than the formal financial houses.

It is against this background that the researcher is to investigate how credit will be effectively administered in cooperative enterprises. This will enable us to identify the major problem associated with credit administration and seek for solution to these problems to ensure continued existence of the cooperative.

1.2 STATEMENT OF PROBLEM

Cooperative society mobilizes credit to their members through the savings of members. It has been observed that they are inefficient in mobilizing and utilization of credit. Many problem lead to this ineffective mobilization of credit. They are as follows:

Inadequate fund for loan purpose
Inefficient management of loan
Faulty loan policy which may sometimes emphasize on credit worthiness of borrowers and not viability of project.
Credit operations are mere money activities without proper organization procedure and planed systematic arrangement.
Absence of regular monitoring and supervision of loans.

The above problems need to be solved for effective performance of cooperatives.

PAYMENT

EFFECTIVE ADMINISTRATION OF CREDITS IN CO-OPERATIVE CREDIT SOCIETIES IN ENUGU STATE. A CASE STUDY OF SELECTED CREDIT CO-OPERATIVE SOCIETIES IN ENUGU NORTH L.G.A

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