Impact of Agricultural Financing Policy and Deposit Money Bank Loan on Agricultural Sector Productivity in Nigeria
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Date
2017
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Abstract
Abstract
In transforming the economic situation of Nigeria, the impact of agriculture cannot be overemphasized.
Agriculture was the primary foreign exchange earner for Nigeria, until the mid-seventies when it lost its
prime position to the mineral sector. One important factor affecting agricultural sector productivity is
inadequate capital. The objective of the study is to evaluate the impact of agricultural financing policy and
deposit money bank loans to agricultural sector on agricultural productivity. The study used time series
linear regression model employing data covering the period of 1981 and 2015. The result revealed that
deposit money bank loans (CBF) and agricultural financing policy proxy by Agricultural Credit Guarantee
Scheme Fund (ACGSF) have significant positive impact on agricultural productivity in Nigeria while
lending rate (LR) shows a significant negative impact on agricultural productivity. It is recommended
that commercial bank should complement the agricultural financing policy of the government by making
agricultural finance accessible, easier and at low rate of interest for farmers. Farmers should also be sensitized
on the benefit of accessing funds from the policy and banks to enhance productivity. The study further
recommends that government should encourage financial inclusion for the farmers.
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Keywords
Agricultural Financing, Deposit Money Bank, Lending Rate, Agricultural Productivity