Daily Collector Systems and the Financing of Small Scale Rural Agribusiness in Delta State, Nigeria

Abstract

The effectiveness of indigenous daily collector system in terms of security and growth of savings of smallholder agribusiness entrepreneurs has attracted the brilliant minds of Economists. This study investigates the effectiveness of Indigenous Daily Deposit collector system in savings security and mobilization, Structured questionnaire was used to collect primary data from 76 randomly selected respondents (agribusiness entrepreneurs). Descriptive statistics were used to analyze data. The result shows that one daily collector could service a mean of 25 daily depositors. Daily depositor could save a mean of ₦9, 100 – ₦13,000 a month. Indigenous daily deposits system encourages capital accumulation in small bits but continously. Daily depositors expressed preference and confidence in the indigenous daily deposit system principally due to elimination of distance factor and stringent protocols involved in conventional banking. Traditional daily deposit collector system was rated effective (57.7%) in terms of security of savings, mobilization of savings and access to deposits. The main constraints are low disposable income and irregular deposits. It was concluded that indigenous daily deposit collector system is an effective complement of conventional banking system. It was recommended that indigenous daily deposit collector system should be encouraged to complement conventional banking system in financing agribusinesses in Nigeria.