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AGRICULTURAL FINANCE - AGRICULTURAL CREDIT

CONTENT
  1. Meaning of Agricultural Credit
  2. Classification or Types of Agricultural Credits
  3. Differences between Agricultural Credits and Subsidies
  4. Problems Faced by Farmers in Procuring Agricultural Credits
  5. Problems Faced by Institutions in Granting Loans to Farmers
 

Meaning of Agricultural Credit

Credits are loans obtained by a farmer to start or expand his farming business. It may be in kind or cash. Credits are payable over a period of time with some interest determined by the source of the credits. Before credit is given out to a farmer, the lender needs detailed information about the borrower. Certain vital statistics are usually provided, such as;
  1. Reliability of the citizen
  2. The intended purpose
  3. The plan for the proposed projects (feasibility Studies)
  4. The ability of the farmer to execute the project successfully
  5. Collateral Security in form of
  6. Landed property (stationed in good site)
  7. Stocks and shares
  8. Life assurance policy
 

Classification or Types of Agricultural Credits

Classification of Agricultural Credits based on Length or Period of Credit

There are three types or classes of credits given to the farmers. They are based on length or period namely:
  1. Short term credits
  2. Medium term credits
  3. Long term credits
 

Short Term Credit

This is a productive credit which the borrower is expected to refund in a year or less. It may be used to purchase livestock feeds, fertilizers, seeds, or to pay for hired labour. They are used to produce crops such as grains and cereals and animals that mature within short period such as broilers in poultry.

Lesson tags: Agricultural Science Lesson Notes, Agricultural Science Objective Questions, SS3 Agricultural Science, SS3 Agricultural Science Evaluation Questions, SS3 Agricultural Science Evaluation Questions First Term, SS3 Agricultural Science First Term, SS3 Agricultural Science Objective Questions, SS3 Agricultural Science Objective Questions First Term
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