Loan administration is one of the external mean of financing many sector of the economy especially the agricultural sector. This is due to the fact that the agricultural sector is the major source of the food production and supply in the country. This loan is been administered through the financial institution established by the federal government of Nigeria. It (loan administration) is been introduced so as to help rural farmers and small-scale business financially in their various businesses. This enhances and increases the agricultural productivity. Loan administration in the financial institution is also one of the elements that determine the extent of economic growth and development in the country. Financial institution in 1990”s do not properly administer their fund to the major sector of the economy which is the agricultural sector and this led to the importation of food to the Nigeria making the country so much dependent on other country for food. Thus the agricultural sector could not boast of food production due to the fact that it was not adequately financed. In Nigeria, up to 75% of its production engage in agriculture which is the major source of food supply in the country and most of them are poor and rural farmers which have limited fund to produce the input and technological required in carrying out their agricultural business. This lack of fund lead to reduction in the food supply in the country and at the same time retard economic growth and development. Therefore, agricultural sector need to be adequately funded through the use of loan administration so that the economy can boast of being independent of other countries and also can develop.

Do to the problem of lack of capital experience in the agriculture sector; especially in the rural farmers and small-scale traders, the federal government of Nigeria took a major concern on the issue of loan administration to enhance development in the country’s economy through financial institution. This led to the establishment of the Nigeria agricultural co-operatives and rural development bank (NACRDB), family economic advancement programme (FEAP), the Nigeria agricultural cooperative and rural development bank (NACRDB). This establish in January 200 but was dually confirmed by the federal executive council of Nigeria in November 200. the bank is been supervised by the federal ministry of agriculture.