Recent Studies have shown that Nigeria is currently the largest producer of cassava in the world with an annual production of over 34 million tonnes of tuberous roots (Food and Agricultural organization,2007). Cassava is the fifth largest crop produced in Nigeria and the third largest source of food carbohydrate in the tropics.

As a food crop,cassava has some inherent characteristics which makes it attractive especially to smallholder farmers in Nigeria. First,it is not only rich in carbohydrate especially starch but also has multiplicity of end uses. It is available all year round making it preferable to other seasonal crops such as peas, beans e.t.c for food security. It is more tolerant to low soil fertility and more resistant to drought,pests and diseases.

Furthermore, its roots are storable in the ground for months after they mature. These attributes combined with other socioeconomic considerations are therefore what International Fund for Agricultural Development (IFAD) has recognized in the crop as lending itself to a commodity-based approach to poverty alleviation (FAO/IC, 1995).

Cross River, Akwa Ibom, Rivers and Delta States dominate Cassava production in the South South. Ogun, Ondo and Oyo States dominate in the South West while Enugu and Imo states dominate its production in the South East. Kaduna alone in the North West is comparable in output to many of the states in the southern regions at almost 2 million tonnes a year with very little currently produced, in the North East.

Cassava is not only important as a food crop but even more as a major source of income for rural household. Cassava production in the country has been increasing for the past 20 or more years due to rapid population growth, large internal market demand and availability of high yielding improved cassava technology.

However, until recently, most of what is produced was consumed locally with over 50 percent of harvested produce wasted due to pre and post production inefficiencies (Lenis et al, 2006). They posit that, if inefficiencies such as inadequate finance, unavailability of land, high cost of labour, e.t.c are addressed alongside the current development of improved varieties of cassava coupled with an associated yield increase, Nigeria could take better advantage of the increased national and international market around the globe.

Cassava is still produced largely by small scale farmers using rudimentary implements. One major factor for the use of rudimentary implements by small scale farmers is lack of funds to get standardized implements. Nweke (2003) and Echebiri and Edaba, (2008) posited that cassava production has doubled and tripled with nearly 90% of production from small holder farms cropped with earlier released improved varieties (TMS 30572, TMS 4(2)1425, TMS 30555) and standardized implements.

GNB Research team placed focus on Ogun state’s cassava production and small scale farmers, being one of the largest producing state in South West. Ogun State is divided into four zones by the Ogun State Agricultural Development Project (OGADEP), namely Abeokuta, Ikenne, Ilaro and Ijebu-Ode. We randomly selected about 200 Small scale cassava farmers among the four zones as our Survey respondents. With the aid of well-structured questionnaire and interactions with some of the farmers, We learnt that inefficiencies such as Inadequate funds for standardized implements, illiteracy, lack of awareness, high cost of labour, high cost of inputs, no insurance e.t.c have been the major challenge for more and improved cassava production in the state.

The good news however, is that the state currently runs the biggest anchor borrowers programme in cassava in the whole Africa, as disclosed recently by the State’s Commissioner for Agriculture, Dr Adeola Odedina. The aim of the programme is to address some of the inefficiencies in cassava production such as lack of fund to get improved implements, improved varieties e.t.c.

From our study, a number of viable business opportunities are open for financial institutions in the state in terms of products and services they can offer to cassava farmers to further address the aforementioned inefficiencies which will invariably help boost their profit making. Financial institutions can further explore the relationships with existing farmer clients and processors, analyse their interactions and develop products and services to suit their needs.

From what we gathered from our study, most farmers indicated they would like to apply for a loan in the future and are willing to access a group loan. The most common reasons for applying for a loan are to purchase improved inputs, rent/buy land and to purchase farm equipment.

In this series, we recommend one way financial institutions can help address inadequate funds for cassava farmers and things to put into consideration to help make informed decisions.

They can provide Credit–Working Capital with the profitability rate, loans related to working capital, equipment and buying land. However to determine farmer’s repayment capacity, financial institutions have to analyse the overall cash flow of the individual farmer, taking into consideration the farmer’s total sources of income and expenditure.

It is also very important for them to understand the agricultural calendar of each farmer, the number of planting seasons and consider the complete farm enterprises that create a cash-flow for the farmer.

An important consideration is that the loan would need to have a long duration (9+ months) due to the long growing season associated with cassava production. It takes up to 8 weeks for cassava farmers to receive payments for cassava tubers supplied to processors. This can be an opportunity for financial institutions to provide farmers with invoice discounting products that can bridge the period until payment.

In series to come, we would be recommending other viable business opportunities for financial institutions aimed at profit making and addressing more of cassava production challenges.