Theory question 110
Agricultural Finance(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 credit.
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(a) Agricultural finance is the study of how money (capital) is obtained, managed and used in farming; agricultural credit is money or inputs lent to farmers to be repaid later, usually with interest
(b) Any six: commercial banks; agricultural/development banks (e.g. Bank of Agriculture); cooperative societies; microfinance banks; government agencies/ADPs; money lenders; friends and relatives; thrift and savings (esusu) groups
(c) Any six: lack of collateral; high interest rates; delay in approving loans; small amounts given; misuse/diversion of loans; poor repayment/default; illiteracy and difficult procedures; lack of records; corruption/bureaucracy
Define both terms, then list six sources and six problems.