Impact of bank of agriculture credit’s on agricultural productivity in South Western Nigeria

Abstract

This study examined the impact of Bank of Agriculture (BOA) credit facilities on agricultural productivity in the South-West region of Nigeria. A multi-stage sampling technique was employed to select 225 beneficiaries and 630 non-beneficiaries farmers. Descriptive statistics were implemented to investigate the socio-economic attributes of the respondents. Impact of credit was analyzed using Propensity Score Matching (PSM), and the productivity of producers was analyzed using Total Factor Productivity (TFP). The respondents' average age was 47.6 years, and 87.0% of them were male. The average PSM score was 0.269, with four matching methods (Nearest Neighbour, Radius, Kernel, and Stratification matching) being implemented. The maximum and minimum propensity were 0.8207 and 0.0525, respectively. Both the balancing property and the region of common support (0.0503, 0.8209) were satisfied. The average treatment effect on the productivity differences of the treated (ATT) was approximately 0.347, and this difference was statistically significant at the 1% level. Productivity of ATT varied by approximately 21.0%. In summary, this investigation provided compelling evidence that the BOA credits have a positive impact on agricultural productivity in the South West. It was suggested that administrations at all levels and financial stakeholders should collaborate to ensure that producers have access to credit.