CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

             A commercial bank can be defined as a financial institution or company carrying on the biz of receiving monies other valuables as deposits from the public for keeping and for lending to the investors on short and medium term basis on which it charges interest such deposit or repayable on demand to the depositors or order. ADEKANYA(1993)

      The early commercial bank in Nigeria were established by the colonial Govt and mainly catering for the interest of the expatriates, thus

financing export trade and neglecting agricultural financing.

The discriminatory attitude makes some Nigeria to establishing indigenous commercial banks could be found in the country which include union bank plc, first bank plc, universal trust bank limited and afribank plc.These institutions perform such services which include the acceptance of deposits in form of cash or cheque   from the public granting of loans and overdraft faculties to customers, issuance  of letters  credit to worthy customers and fund transfer service  discounting of bills.  Etc.                                                                         

 Despite the amount  of loan being channeled to the agricultural sector for industrial development by commercial banks, the agricultural sector still suffers from some in he rent problems militating against the industrial and agricultural of the nations. And  there has been continuous shortage of basic food items in the nation as a result of lack of agricultural development.

            The prices of food items are always develop as result of limited yearly output of agricultural products. A huge sums of foreign exchange is spent annually on the important of   raw materials for local industries which would have been source locally, if the agricultural sector was full developed. Also farmers and other agro-base ventures are not motivated towards obtain agricultural loan facilities due to the banks stringent measure of loan appraised, disbursement &re-payment.

      Finally, a lot of foreign exchange earnings which would have been earned through commodity exports as a result of improved agricultural