1.0 INTRODUCTION

Let me first express my gratitude to the organizers of this workshop, The Community Development Foundation (CDF) for this topical issue that is central to the development of Nigerian economy especially agricultural development, food security, as well as wealth creation. These are key components of the present Administration􏰀s Seven-point Agenda vis-à-vis the realization of the Administration􏰀s vision 20-2020. I also appreciate our valued Development Partner, the Ford Foundation for providing the sponsorship for this important workshop.

The importance of rural finance in Nigeria cannot be overemphasized in that more than 50 percent of Nigeria􏰀s population and more than 70% of its poor resides in the rural areas. In Nigeria, the formal financial system provides services to about 35% of the economically active population while the remaining 65% are excluded from access to financial services. These 65% are often served by the informal financial sector, through Non-Governmental Organization 􏰁 microfinance institutions (NGO-MFIs), moneylenders, friends, relatives and credit unions.

Distinguished Ladies and Gentlemen, I would not want to waste your time on what rural development is, as I am sure all of us are very familiar with this but we need to remind ourselves and have it at the back of our memory what exactly constitutes rural development so as to appreciate the challenges associated with the financing.

Simply defined, rural development is a strategy and process designed to transform the nation􏰀s rural life and landscape by ensuring progressive social, economic, cultural and political improvements. It stresses a fundamental principle; that the rural people must share fully in this development process through equitable access to resources, inputs and services and participation in the design and implementation of development programmes.

Historically, Nigeria􏰀s rural development efforts had been considered mainly in the context of agricultural development. This is because the rural 􏰁 sector is predominantly agricultural based. This unfortunate situation, which neglected contributions of other sectors to the improvement of the quality of life of the rural dwellers, hindered a multi-sectoral and integrated approach to rural development programming in Nigeria. In 2001 the Federal Government approved a National Policy on Integrated Rural Development together with a complimentary implementation blue print Rural Development Sector Strategy. There are to guide rural development activities in Nigeria. The implementation of the policy has however not had any remarkable impact on rural development in Nigeria. 

2.0. OVERVIEW OF RURAL FINANCE IN NIGERIA

Nigeria has a long history of rural finance and in recognition of its importance; past governments initiated various interventions to enhance financial service delivery in the rural areas. However, most of the interventions have not achieved the desired results and some have failed woefully. Some of the past interventions are listed below:

i. Nigeria Agricultural Credit Bank (NACB) 􏰁 1973 􏰁 2000; 

Rural Banking Program 􏰁 1977 􏰁 2000;

Agricultural Credit Guaranteed Scheme Fund 􏰁 1977 till date;

Nigerian Agricultural Insurance Company 􏰁 1988 till date;

Peoples􏰀 Bank of Nigeria 􏰁 1989 􏰁 2001;

Self-Help Group (SHG) Linkage programme 􏰁 1991 (Some SHG exist till

date);

Family Economic Advancement Programme 􏰁 1994 􏰁 2001;

Nigerian Agricultural Cooperative and Rural Development Bank 􏰁 2001 till

date;

Trust Fund Model 􏰁 2001 till date;

National Poverty Eradication Programme 􏰁 2001 till date;

Small and Medium Equity Investment Scheme 􏰁 2001 till date;

Agricultural Credit Support Scheme 􏰁 2006 till date;

Community Banking System 􏰁 1990 􏰁 2005;

Micro 􏰁 Finance Policy Framework 􏰁 2005 till date.

Permit me to dwell a bit on two or three agencies that provide or oversees 􏰁

Rural Financing in Nigeria:

2.1. NIGERIAN AGRICULTURAL COOPERATIVE AND RURAL DEVELOPMENT BANK (NACRDB).

The birth of the Nigerian Agricultural, Cooperative and Rural Development Bank (NACRDB) Limited was one of the efforts of the Federal Government of Nigeria aimed at boosting the delivery of agricultural and rural credit,