The Impact of Commercial Banks’ Credit to Agriculture on Agricultural Development in Nigeria: An Econometric Analysis
Sunny Ibe Obilor

This study aimed at evaluating the impact of commercial banks' credit to agricultural sector under the Agricultural Credit Guarantee Scheme Fund in Nigeria. Until the mid-seventies, agriculture was the primary foreign exchange earner for Nigeria. Now it has lost its prime position to the mineral sector. Of these factors, inadequate capital is considered as the single most important factor affecting the performance of the sector. It therefore empirically examined the impact of Agricultural Credit Guarantee Scheme Fund, agricultural product prices, government fund allocation and commercial banks’ credit to agricultural sector on agricultural productivity. The result revealed that Agricultural Credit Guarantee Scheme Fund and Government fund allocation to agriculture produced a significant positive effect on agricultural productivity, while the other variables produced a significant negative effect. It is recommended that farmers should be encouraged to be applying for loans from the participating banks to enhance their agricultural activities and productivity.

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