Impact of commercial bank credit on agricultural output in Nigeria

Oyelade, Aduralere Opeyemi

doi:10.32728/ric.2019.51/1

Cited by 4 publications

(4 citation statements)

References 5 publications

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“…According to Oyelade (2019), one of the reasons behind the decline of the agricultural sector's contribution to the GDP is the lack of access to credit from commercial banks. This lack of access hinders farmers from seizing economic opportunities, increasing output, and escaping poverty.…”

Section: Statement Of the Problemmentioning

confidence: 99%

Effect of Bank Lending on Agricultural Output in Nigeria From 1981 – 2021 (Auto-regresive Distribution Approach)

SALISU,

ALAMU

2023

Preprint

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Lending plays a vital role in expediting agricultural modernization and encouraging farmer involvement in the development process. By alleviating financial constraints, lending offers the motivation to embrace new technologies that might otherwise be adopted at a slower pace. This study investigates the effect of bank lending on agricultural activities in Nigeria from 1981 - 2021 using a secondary form of analysis. Different diagnostic tests were carried out, which include descriptive statistics, a pear wise correlation matrix, unit root test, co-integration test, and an auto regressive distributed model (ARDL). The result of the study shows that commercial bank lending to agriculture and interest rates have a positive and statistically significant effect on agricultural output in Nigeria. The study recommends that the government should strengthen financial institutions, which are the credit agencies, in order to ensure efficient disbursement of funds to agricultural and manufacturing sectors and ensure that funds are not misappropriated for other purposes, in order to boost economic growth.

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Section: Statement Of the Problemmentioning

confidence: 99%

Effect of Bank Lending on Agricultural Output in Nigeria From 1981 – 2021 (Auto-regresive Distribution Approach)

SALISU,

ALAMU

2023

Preprint

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“…Oyelade [21] examines the influence of bank credits on agricultural productivity in Nigeria, spanning from 1980 to 2015. Adopting the FMOLS approach, the result revealed that the interest rate on commercial banks' credit to agriculture and deposit money banks' assets exerts a strong influence on agricultural performance.…”

Section: Empirical Reviewmentioning

confidence: 99%

The effect of bank credits on agricultural output in Nigeria: 1981–2019

Ugbede Junior,

Nwankwo

2023

Sustain. Econ.

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The agriculture sector of the Nigerian economy has suffered a severe setback, particularly after the advent of oil in mass production. The government shifted attention completely to the oil sector at the detriment of the agriculture sector, resulting in a practice of mono-economy. However, in recent times, the government has seen the need to diversify the economy to reduce over-dependent on the oil sector. Thus, both the bank and the government have been channeling resources to the sector to boast its productive capacity. Thus, this study seeks to investigate the impact of bank credit on the agriculture sector from 1981 to 2019. The data was subjected to a preliminary test—unit root test—to ascertain the order of integration and subsequently the method of estimation. The unit root outcome shows a mixed order, which informed the adoption of the dynamic ARDL method. The finding from the estimation proved that the impact of bank credit on agriculture productivity in the long run is positive but weak. This suggests that bank credit to agriculture could not explain the variation in the performance of sectoral output. In contrast, the impact of government expenditure on the agriculture sector is strong and positive. This validates the significant contribution of government involvement in the revival of the sector. Thus, a recommendation is made of the need for banks to increase their credit and loan advances to the agriculture sector by lowering the interest charged on loans to the sector. Secondly, banks should give close monitoring to the funds loaned out to the agriculture sector to ensure the funds are truly channeled to the sector and not diverted. Moreso, the government can still do more for the sector to fully revive. More productivity-enhancing strategies, such as subsidizing modern farm equipment, seeds, and so on, can still be put in place by the government to assist the sector regain its lost glory.

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“…credit of commercial banks and expenditure made by the government on agriculture. Oyelade [26] invested the impact of commercial banks' credit on agricultural output in Nigeria over the period of 1980 to 2015. This study found that the commercial bank's loan and the interest rate on commercial banks credit to agriculture determine and affect the output of the agricultural sector.…”

Section: Review Of Literaturementioning

confidence: 99%

Agriculture Sector Credit and Output Relationship in Nepal

Dahal¹,

Thapa²

2020

AJEBA

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Purpose: The purpose of this study is to find out the condition of priority of commercial banks to provide loans to the agricultural sector and to find the relationship and impact of agricultural loans to the agricultural GDP of Nepal. Objectives: This study aims to compare the condition of loan disbursements in agricultural and manufacturing sectors. It further aims to compare loan percent with growth and contribution to the GDP of the agricultural and industrial sectors and tries to show the impact of agricultural loans to the agricultural GDP of Nepal. Methods: It was based on a descriptive and analytical research design. Statistical tools standard deviation, correlation, regression, etc. are used and Excel, and EViews software are used for the statistical calculations. Statistical calculations and graphs are simultaneously used to show and compare the condition of variables. Results: Commercial banks give higher priority to the manufacturing sector for loans than the agricultural sector. The Johansen Co-integration test indicates no long-run relationship between loans of commercial banks and agricultural output in Nepal. However, the least-squares method, it indicates that a positive causal relationship between agricultural loans and agricultural growth. Implications: The loans of commercial banks directly stimulate the growth of agriculture but the amount of growth is less noticeable. Thus, it is concluded that the commercial bank's loan alone cannot affect and control the growth of the agricultural sector of the Nepalese economy therefore the government should increase its expenditure on the agricultural sector.

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Impact of commercial bank credit on agricultural output in Nigeria

Cited by 4 publications

References 5 publications

Effect of Bank Lending on Agricultural Output in Nigeria From 1981 – 2021 (Auto-regresive Distribution Approach)

Effect of Bank Lending on Agricultural Output in Nigeria From 1981 – 2021 (Auto-regresive Distribution Approach)

The effect of bank credits on agricultural output in Nigeria: 1981–2019

Agriculture Sector Credit and Output Relationship in Nepal

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