Financial Intermediation and Agricultural Output in Nigeria: An Impact Analysis of Deposit Money Banks’ Credit

Ali Jude Igyo; Jatau Simon; Ekpe Mary Jane

doi:doi:10.11648/j.ijae.20160101.13

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Financial Intermediation and Agricultural Output in Nigeria: An Impact Analysis of Deposit Money Banks’ Credit

Ali Jude Igyo, Jatau Simon, Ekpe Mary Jane

Published in International Journal of Agricultural Economics (Volume 1, Issue 1)

Received: 21 April 2016 Accepted: 4 May 2016 Published: 28 May 2016

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Abstract

The study examined the impact of deposit money banks’ credit on agricultural output in Nigeria from 1981 to 2014.Secondary data for the study was obtained from Central Bank of Nigeria. The ordinary least square method was used for data analysis. Unit root was used to test for data stationarity, while Variance Inflation Factor (VIF) and Heterosckedasticity white Test were used for data diagnosis. Findings of the regression analysis revealed that deposit money banks´ credit significantly and positively affected agricultural output while the result for Deposit Money Banks’ lending rate (DMBLR) shows that DMBLR has an inverse and insignificant impact on Agricultural output (AQ). Also the trend in the Deposit Money Banks’ credit to the agricultural sector has contained in the CBN bulletin increased considerably within the period under study. There was, however, a sharp decline in loan stock in 2007. Thus, the study concludes that Deposit Money banks’ credit is a viable source of finance for sustainable growth in the agricultural sector. The study therefore recommends that Deposit Money banks’ should increase the volume of credit facilities to the agricultural sector to sustain food production for the teeming population of Nigeria; they should however concentrate on the real farmers. Also the cost of Deposit Money banks’ credit facilities should be subsidized or be reduced to a single digit lending rate for agric. businesses and should have a longer moratorium to ensure effective performance of both agricultural output and the credit facilities.

Published in	International Journal of Agricultural Economics (Volume 1, Issue 1)
DOI	10.11648/j.ijae.20160101.13
Page(s)	16-25
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2016. Published by Science Publishing Group

Keywords

Deposit Money Banks’, Credit, Lending Rate, Agricultural Output

References

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APA Style

Ali Jude Igyo, Jatau Simon, Ekpe Mary Jane. (2016). Financial Intermediation and Agricultural Output in Nigeria: An Impact Analysis of Deposit Money Banks’ Credit. International Journal of Agricultural Economics, 1(1), 16-25. https://doi.org/10.11648/j.ijae.20160101.13

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ACS Style

Ali Jude Igyo; Jatau Simon; Ekpe Mary Jane. Financial Intermediation and Agricultural Output in Nigeria: An Impact Analysis of Deposit Money Banks’ Credit. Int. J. Agric. Econ. 2016, 1(1), 16-25. doi: 10.11648/j.ijae.20160101.13

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AMA Style

Ali Jude Igyo, Jatau Simon, Ekpe Mary Jane. Financial Intermediation and Agricultural Output in Nigeria: An Impact Analysis of Deposit Money Banks’ Credit. Int J Agric Econ. 2016;1(1):16-25. doi: 10.11648/j.ijae.20160101.13

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@article{10.11648/j.ijae.20160101.13,
  author = {Ali Jude Igyo and Jatau Simon and Ekpe Mary Jane},
  title = {Financial Intermediation and Agricultural Output in Nigeria: An Impact Analysis of Deposit Money Banks’ Credit},
  journal = {International Journal of Agricultural Economics},
  volume = {1},
  number = {1},
  pages = {16-25},
  doi = {10.11648/j.ijae.20160101.13},
  url = {https://doi.org/10.11648/j.ijae.20160101.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijae.20160101.13},
  abstract = {The study examined the impact of deposit money banks’ credit on agricultural output in Nigeria from 1981 to 2014.Secondary data for the study was obtained from Central Bank of Nigeria. The ordinary least square method was used for data analysis. Unit root was used to test for data stationarity, while Variance Inflation Factor (VIF) and Heterosckedasticity white Test were used for data diagnosis. Findings of the regression analysis revealed that deposit money banks´ credit significantly and positively affected agricultural output while the result for Deposit Money Banks’ lending rate (DMBLR) shows that DMBLR has an inverse and insignificant impact on Agricultural output (AQ). Also the trend in the Deposit Money Banks’ credit to the agricultural sector has contained in the CBN bulletin increased considerably within the period under study. There was, however, a sharp decline in loan stock in 2007. Thus, the study concludes that Deposit Money banks’ credit is a viable source of finance for sustainable growth in the agricultural sector. The study therefore recommends that Deposit Money banks’ should increase the volume of credit facilities to the agricultural sector to sustain food production for the teeming population of Nigeria; they should however concentrate on the real farmers. Also the cost of Deposit Money banks’ credit facilities should be subsidized or be reduced to a single digit lending rate for agric. businesses and should have a longer moratorium to ensure effective performance of both agricultural output and the credit facilities.},
 year = {2016}
}

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TY  - JOUR
T1  - Financial Intermediation and Agricultural Output in Nigeria: An Impact Analysis of Deposit Money Banks’ Credit
AU  - Ali Jude Igyo
AU  - Jatau Simon
AU  - Ekpe Mary Jane
Y1  - 2016/05/28
PY  - 2016
N1  - https://doi.org/10.11648/j.ijae.20160101.13
DO  - 10.11648/j.ijae.20160101.13
T2  - International Journal of Agricultural Economics
JF  - International Journal of Agricultural Economics
JO  - International Journal of Agricultural Economics
SP  - 16
EP  - 25
PB  - Science Publishing Group
SN  - 2575-3843
UR  - https://doi.org/10.11648/j.ijae.20160101.13
AB  - The study examined the impact of deposit money banks’ credit on agricultural output in Nigeria from 1981 to 2014.Secondary data for the study was obtained from Central Bank of Nigeria. The ordinary least square method was used for data analysis. Unit root was used to test for data stationarity, while Variance Inflation Factor (VIF) and Heterosckedasticity white Test were used for data diagnosis. Findings of the regression analysis revealed that deposit money banks´ credit significantly and positively affected agricultural output while the result for Deposit Money Banks’ lending rate (DMBLR) shows that DMBLR has an inverse and insignificant impact on Agricultural output (AQ). Also the trend in the Deposit Money Banks’ credit to the agricultural sector has contained in the CBN bulletin increased considerably within the period under study. There was, however, a sharp decline in loan stock in 2007. Thus, the study concludes that Deposit Money banks’ credit is a viable source of finance for sustainable growth in the agricultural sector. The study therefore recommends that Deposit Money banks’ should increase the volume of credit facilities to the agricultural sector to sustain food production for the teeming population of Nigeria; they should however concentrate on the real farmers. Also the cost of Deposit Money banks’ credit facilities should be subsidized or be reduced to a single digit lending rate for agric. businesses and should have a longer moratorium to ensure effective performance of both agricultural output and the credit facilities.
VL  - 1
IS  - 1
ER  -

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Author Information

Ali Jude Igyo

Departmentof Banking &Finance, Faculty of Management Science, Federal University of Agriculture, Makurdi, Benue State, Nigeria
Jatau Simon

Department of Accounting and Finance, Faculty of Management Science, Federal University of Agriculture, Makurdi, Benue State, Nigeria
Ekpe Mary Jane

Department of Accountancy, Federal Polytechnic, Nassarawa State, Nigeria

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APA Style

Ali Jude Igyo, Jatau Simon, Ekpe Mary Jane. (2016). Financial Intermediation and Agricultural Output in Nigeria: An Impact Analysis of Deposit Money Banks’ Credit. International Journal of Agricultural Economics, 1(1), 16-25. https://doi.org/10.11648/j.ijae.20160101.13

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ACS Style

Ali Jude Igyo; Jatau Simon; Ekpe Mary Jane. Financial Intermediation and Agricultural Output in Nigeria: An Impact Analysis of Deposit Money Banks’ Credit. Int. J. Agric. Econ. 2016, 1(1), 16-25. doi: 10.11648/j.ijae.20160101.13

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AMA Style

Ali Jude Igyo, Jatau Simon, Ekpe Mary Jane. Financial Intermediation and Agricultural Output in Nigeria: An Impact Analysis of Deposit Money Banks’ Credit. Int J Agric Econ. 2016;1(1):16-25. doi: 10.11648/j.ijae.20160101.13

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@article{10.11648/j.ijae.20160101.13,
  author = {Ali Jude Igyo and Jatau Simon and Ekpe Mary Jane},
  title = {Financial Intermediation and Agricultural Output in Nigeria: An Impact Analysis of Deposit Money Banks’ Credit},
  journal = {International Journal of Agricultural Economics},
  volume = {1},
  number = {1},
  pages = {16-25},
  doi = {10.11648/j.ijae.20160101.13},
  url = {https://doi.org/10.11648/j.ijae.20160101.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijae.20160101.13},
  abstract = {The study examined the impact of deposit money banks’ credit on agricultural output in Nigeria from 1981 to 2014.Secondary data for the study was obtained from Central Bank of Nigeria. The ordinary least square method was used for data analysis. Unit root was used to test for data stationarity, while Variance Inflation Factor (VIF) and Heterosckedasticity white Test were used for data diagnosis. Findings of the regression analysis revealed that deposit money banks´ credit significantly and positively affected agricultural output while the result for Deposit Money Banks’ lending rate (DMBLR) shows that DMBLR has an inverse and insignificant impact on Agricultural output (AQ). Also the trend in the Deposit Money Banks’ credit to the agricultural sector has contained in the CBN bulletin increased considerably within the period under study. There was, however, a sharp decline in loan stock in 2007. Thus, the study concludes that Deposit Money banks’ credit is a viable source of finance for sustainable growth in the agricultural sector. The study therefore recommends that Deposit Money banks’ should increase the volume of credit facilities to the agricultural sector to sustain food production for the teeming population of Nigeria; they should however concentrate on the real farmers. Also the cost of Deposit Money banks’ credit facilities should be subsidized or be reduced to a single digit lending rate for agric. businesses and should have a longer moratorium to ensure effective performance of both agricultural output and the credit facilities.},
 year = {2016}
}

Copy | Download

TY  - JOUR
T1  - Financial Intermediation and Agricultural Output in Nigeria: An Impact Analysis of Deposit Money Banks’ Credit
AU  - Ali Jude Igyo
AU  - Jatau Simon
AU  - Ekpe Mary Jane
Y1  - 2016/05/28
PY  - 2016
N1  - https://doi.org/10.11648/j.ijae.20160101.13
DO  - 10.11648/j.ijae.20160101.13
T2  - International Journal of Agricultural Economics
JF  - International Journal of Agricultural Economics
JO  - International Journal of Agricultural Economics
SP  - 16
EP  - 25
PB  - Science Publishing Group
SN  - 2575-3843
UR  - https://doi.org/10.11648/j.ijae.20160101.13
AB  - The study examined the impact of deposit money banks’ credit on agricultural output in Nigeria from 1981 to 2014.Secondary data for the study was obtained from Central Bank of Nigeria. The ordinary least square method was used for data analysis. Unit root was used to test for data stationarity, while Variance Inflation Factor (VIF) and Heterosckedasticity white Test were used for data diagnosis. Findings of the regression analysis revealed that deposit money banks´ credit significantly and positively affected agricultural output while the result for Deposit Money Banks’ lending rate (DMBLR) shows that DMBLR has an inverse and insignificant impact on Agricultural output (AQ). Also the trend in the Deposit Money Banks’ credit to the agricultural sector has contained in the CBN bulletin increased considerably within the period under study. There was, however, a sharp decline in loan stock in 2007. Thus, the study concludes that Deposit Money banks’ credit is a viable source of finance for sustainable growth in the agricultural sector. The study therefore recommends that Deposit Money banks’ should increase the volume of credit facilities to the agricultural sector to sustain food production for the teeming population of Nigeria; they should however concentrate on the real farmers. Also the cost of Deposit Money banks’ credit facilities should be subsidized or be reduced to a single digit lending rate for agric. businesses and should have a longer moratorium to ensure effective performance of both agricultural output and the credit facilities.
VL  - 1
IS  - 1
ER  -

Copy | Download