Analysis Of Factors Affecting Demand For Agricultural Credit From Commercial Banks In Nigeria (1986-2005).

Abstract

Agricultural credit from commercial banks in Nigeria from 1986 to 2005 was analysed. Time series published data collected included agricultural GDP, commercial banks’ agricultural credit and commercial lending rate. A multiple regression analysis approach involving the use of ordinary least squares (OLS) estimation techniques was adopted. Agricultural income and net borrowing requirement had a positive and significant effect on banks’ agricultural credit demand, while commercial banks’ lending rate had a negative insignificant influence on commercial banks’ agricultural credit demand. Commercial banks’ agricultural credit demand is inelastic with respect to agricultural income, lending rate and net borrowing requirement. For the agricultural sector to meet up with demand for commercial banks’ credit, income and net borrowing requirement of agricultural sector should be increased. The ACGSF should be reinvigorated to effectively guarantee and subsidize agricultural credit from commercial banks.