The Impact of Credit Policy Environment on Poultry Production in Nigeria

Abstract

The research gave empirical data on the correlation between poultry production index and the credit policy environment in Nigeria. An autoregressive distributed lag (ARDL) bound test approach was employed to establish co-integration between series. The estimated long and short-run models parameters demonstrated stability, best quality, efficiency, and unbiased. The findings showed that in the long run, the commercial bank loan to the agricultural sector and domestic credit to the private sector had a significant positive influence on poultry production index while agricultural credit guarantee scheme loan to poultry subunit and lending interest rate exhibited negative relationships. In the short run, the current year coefficient of lending interest rate, the agricultural credit guarantee scheme loan to poultry subunit and domestic credit to the private sector had significant negative correlation with the poultry production index. However, the commercial bank credit to the agricultural sector showed positive effect on poultry production in the short run. The implication of the finding justifies the need to increase the commercial bank credit to the agricultural sector and domestic credit to private sector as a strategy to boost poultry production. Also, the agricultural credit guarantee scheme fund should be reassessed and modify to render it initial objectives. The lending rate should be deliberately lowered to increase credit access by the poultry farmers.