Agricultural Financing in Nigeria: An Empirical Study of Nigerian Agricultural Co-operative and Rural Development Bank (NACRDB): 1990-2010

Abstract

The role of agricultural credit as a factor of production to facilitate economic growth and development as well as the need to appropriately channel credit to rural areas for economic development of the poor rural farmers cannot be over emphasized. Credit (capital) is viewed as more than just another resource such as labour, land, equipment and raw materials. The objective of this work is to examine agricultural financing in Nigeria and its implications on the growth of Nigerian economy using ordinary least square method and quantitative research design. The study observed that there is significant relationship between agricultural financing and the growth of Nigerian economy and that the level of loan repayment rate over the years has indeed negatively impacted significantly on the growth of Nigerian economy. The result has an important implication in terms of policies that will enhance economic growth through agricultural financing. We therefore recommend that, having seen that there is long-run relationship between NACRDB agricultural financing and economic growth in Nigeria. There is need to increase the level and size of NACRDB agricultural loan through the reduction of interest rate to allow for more economic development in the country.