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Analysis Of Savings And Investment Strategies Among Cassava Processors
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1.2. STATEMENT OF THE PROBLEM
There are several problems that affect
the level of savings and investment strategies of agro-processors.
While acknowledging that socio-economic characteristics of the
agro-processors may vary from one occupation to another, recent studies
like Adeyemo and Bamire (2005) suggest that socio-economic
characteristics such as age, sex, farming experience, household
size…etc, affect the level of savings and investment strategies among
agro-processors. One of the problems confronting the development of the
agricultural sector in Nigeria could be attributed to inadequate
savings and investment by the small scale farmers (and agro-processors).
Despite this problem, policy makers have not really drawn up adequate
and comprehensive rural savings scheme that will ginger the farmers to
invest their capital productively (Ogwanighie,1997). Many farmers
(andagro-processors) in Nigeria have not been able to finance their
businesses due to poor access to credit, poor savings rate, risk and
uncertainty, poor weather condition among other difficulties, thereby
resulting to other means of mobilizing savings and funds for investment
such as cooperatives and other informal financial institutions.
Odoemenem, et al. (2005) observed that farmers make use of informal
financial sectors to mobilize savings to develop their rural
communities. They further observed that rural farmers make use of
informal financial institutions because they give them access to loans
they cannot get from formal financial institutions due to lack of
collateral. Though, this sector has its own prevalent problems such as
inadequate capital base for operation, poor record keeping, crude
accounting system, gross mismanagement; farmers still prefer them to
banks. Recently, there has been an upsurge of interest among development
economists, governments and international donor organizations to
increase financial savings in developing countries, particularly in
rural areas and among poor households. However, a large number of
developing countries are unable to mobilize the potential savings of the
non-corporate sector because the structure of their financial
institutions, financial instruments and financial policies are not sound
(Reardon,2000). In view of this, with major focus on cassava processors
(those into fufu production), the questions of interest in this study
are; · What are the socio-economic characteristics of the cassava
processors in the study area? · What is the investment pattern
of the cassava processors in the study area? · What are the
existing income levels of the cassava processors in the study area?
· What is the savings rate of the cassava processors in the study
area? · What are the determinants of savings and investment
among the cassava processors in the study area? This study attempts to
provide answers to the questions identified.
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