EFFECT OF BANK CREDITS ON AGRICULTURAL OUTPUT: EVIDENCE FROM EDO STATE, NIGERIA

Abstract

This study investigated the effects of bank credits on agricultural output in EdoState, Nigeria. Emphasis was laid on the credits of Deposit Money Banks, BOA (Bank ofAgriculture), and microfinance banks. The survey research design was adopted, and farmers fromEsan North-East, Esan Central, Esan South-East, Etsako West, Igueben, and Uhunmwonde LocalGovernment Areas (LGAs) of Edo State served as the unit of analysis. The stratified randomsampling technique was employed to determine the number of farmers included in the study. Thesefarmers were reached using questionnaires and personal interviews. The quantified version of thecollected data was subjected to descriptive analysis, correlation analysis, and joint and individualtests at a 5% level of significance. Findings revealed that the credit of Deposit Money Banks hasa positive and significant effect on agricultural output, while the credit of the Bank of Agricultureand microfinance banks has positive, but insignificant, effects on agricultural output. Hence, bankcredits have positive effects on agricultural output in Edo State, Nigeria. As such, to enhance theoutput of the agricultural sector in Edo State, the government of the day should encourage depositmoney banks, BOA and microfinance banks to extend more credit to farmers in the state.Nevertheless, measures should be put in place to ensure that farmers repay such loans as theybecome due. Thus, all existing farmers in the state should be properly registered with the Ministryof Agriculture so that their activities can be properly monitored, allowing the government to serveas a guarantor for these farmers.