What you'll learn

• Meaning of agricultural finance.
• Importance of agricultural Finance.
• Sources of farm financing.
• .Personal savings.
• .commercial banks,
• .Cooperative societies.
• .Government ( local ,state and federal)
• -Non-Governmental Organizations, etc.
• Classes of credit
• a) Classification based on length of period
• (i.e. time period)
• i. short-term credit
• ii. Medium term credit
• Long term credit
• b) Classification based on sources of credit.
• Institutional credit.
• E.g. Banks, Cooperatives, Government, NGO’S.
• ii. Non-institutional credit. E.g. personal savings, friends and relatives and money merchants.
• c) Classification based on liquidity.
• i. Loan in cash
• ii. Loan in kind.
• Problems faced by farmers in procuring agric-credit
• a) High interest rate
• b) Lack of or inadequate collateral, etc.
• Problems faced by institutions in granting loans to farmers.
• -Lack of farm records and accounts on the part of the farmers, etc.
• a) Meaning of capital market institutions that deals with medium and long term loans for agric-business)
• b) Institutions involved in the capital market.
• -commercial Banks
• -Mortgage Agric.
• -Cooperative, and Rural development bank (NACRDB), etc.
• c). Source of funds for the capital markets.
• -Bonds
• -Insurance companies
• -Merchant banks.
• -The stock exchange ( sales & purchases of shares)
• d) Roles of capital markets
• -Funds for on-lending.
• -Reduce over reliance on money market, etc