Effect Of Commercial Banks’ Credit On Agricultural Growth In Nigeria

ABSTRACT

The main objective of this study is to examine the effect of commercial banks’ credit on agricultural growth in Nigeria using time series data from 1981-2014. Secondary source of data collection was used. The data collected were subjected to ADF-Augmented Dickey Fuller test. Descriptive statistics was used to determine the values of various measures included in the work. The ex-post facto research design was used and the data were analyzed using multiple regression analysis method. The analysis revealed that commercial banks' loans and advances have positive and significant impact on agricultural growth in Nigeria. Agricultural credit guarantee scheme fund has also a positive and significant impact on agricultural growth in Nigeria. Lending rate was found to have a negative and insignificant impact on agricultural growth in Nigeria. Based on the findings, the study recommended that government and other monetary authorities should use rewards and other measures of incentive that will motivate commercial banks in granting more loans and advances to agricultural sector. Government should also strengthen agricultural credit guarantee scheme by increasing the percentage of her guarantee against loan default to about 90%, so as to increase the confidence of commercial banks in granting more credit to agricultural sector in Nigeria.