IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2020-02-3.html
   My bibliography  Save this article

Agricultural Credit Guarantee in Nigeria and the Uncertainties of the Macroeconomic Environment

Author

Listed:
  • Emmanuel O. Eyo

    (Department of Agricultural Economics, University of Calabar, Calabar, Nigeria.)

  • Merrian A. Nwaogu

    (Department of Agricultural Economics, University of Calabar, Calabar, Nigeria.)

  • Michael E. Agenson

    (Department of Agricultural Economics, University of Calabar, Calabar, Nigeria.)

Abstract

Efforts to revitalize agricultural credit delivery became a reality in 1977 with the establishing of the Agricultural Credit Guarantee Scheme Fund. This study assesses the Agricultural Credit Guarantee Scheme (ACGS) under the Nigerian macroeconomic environment. It assesses the real value of loans guaranteed overtime; analyzes agricultural output in agriculture credit guarantee scheme, analyses the effect of changes in interest rate and other variables on the volume of loans guaranteed. Data obtained were analyzed using both descriptive and inferential statistics. This study suggests that the macroeconomic environment has not been friendly with ACGS operations. Credit guarantee contributes positively to increased agricultural output, but the number and value of loans guarantee as well as the performance of loans and agricultural sector output would be greatly enhance by policies that make interest rates, inflation, stock market capitalization, nominal exchange rates and other variables of the macroeconomic environment agricultural sector friendly and supportive.

Suggested Citation

  • Emmanuel O. Eyo & Merrian A. Nwaogu & Michael E. Agenson, 2020. "Agricultural Credit Guarantee in Nigeria and the Uncertainties of the Macroeconomic Environment," International Journal of Economics and Financial Issues, Econjournals, vol. 10(2), pages 20-29.
    • Handle: RePEc:eco:journ1:2020-02-3
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijefi/article/download/9101/pdf
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijefi/article/view/9101/pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fabio Pizzutilo & Francesco Cal, 2015. "Loan Guarantees: An Option Pricing Theory Perspective," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 905-909.
    2. Yoshino, Naoyuki & Taghizadeh-Hesary, Farhad, 2016. "Optimal Credit Guarantee Ratio for Asia," ADBI Working Papers 586, Asian Development Bank Institute.
    3. Stephen D. Oliner & Glenn D. Rudebusch, 1996. "Is there a broad credit channel for monetary policy?," Economic Review, Federal Reserve Bank of San Francisco, pages 3-13.
    4. Sosin, Howard B, 1980. "On the Valuation of Federal Loan Guarantees to Corporations," Journal of Finance, American Finance Association, vol. 35(5), pages 1209-1221, December.
    5. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    6. Sial, Maqbool Hussain & Awan, Masood Sarwar & Waqas, Muhammad, 2011. "Role of Institutional Credit on Agricultural Production: A Time Series Analysis of Pakistan," MPRA Paper 31815, University Library of Munich, Germany.
    7. Selby, M J P & Franks, J R & Karki, J, 1988. "Loan Guarantees, Wealth Transfers and Incentives to Invest," Journal of Industrial Economics, Wiley Blackwell, vol. 37(1), pages 47-65, September.
    8. Nigerian, Association of Agricultural Economists, 2020. "Nigerian Journal of Agricultural Economics," Nigerian Journal of Agricultural Economics, Nigerian Journal of Agricultural Economics, vol. 10(1), October.
    9. Laura Rondi & Brian Sack & Fabio Schiantarelli & Alessandro Sembenelli, 1998. "Firms' Financial and Real Responses to Monetary Tightening: Evidence for Large and Small Italian Companies," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 57(1), pages 35-64, April.
    10. Steven P. Feinstein & Allen J. Michel & Israel Shaked, 2004. "Valuation of Credit Guarantees: An Application of Economic Theory in Litigation," Journal of Forensic Economics, National Association of Forensic Economics, vol. 17(1), pages 17-37, December.
    11. Black, Fischer & Scholes, Myron S, 1973. "The Pricing of Options and Corporate Liabilities," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 637-654, May-June.
    12. Jones, E. Philip & Mason, Scott P., 1980. "Valuation of loan guarantees," Journal of Banking & Finance, Elsevier, vol. 4(1), pages 89-107, March.
    13. Yoshino, Naoyuki & Taghizadeh-Hesary, Farhad & Nili, Farhad, 2015. "Estimating Dual Deposit Insurance Premium Rates and Forecasting Non-performing Loans: Two New Models," ADBI Working Papers 510, Asian Development Bank Institute.
    14. Yoshino, Naoyuki & Taghizadeh-Hesary, Farhad, 2019. "Optimal credit guarantee ratio for small and medium-sized enterprises’ financing: Evidence from Asia," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 342-356.
    15. Rumen Dobrinsky & Nikolay Markov, 2003. "Policy Regime Change And Corporate Credit In Bulgaria: Asymmetric Supply And Demand Responses," William Davidson Institute Working Papers Series 2003-607, William Davidson Institute at the University of Michigan.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shaibu, Ufedo Monday & Umeh, Joseph Chinedu & Abu, Godwin Anjeinu & Abu, Orefi, 2022. "Nexus of Agricultural Credit and Sustainable Food Production in Nigeria: Application of A Modified Regression Model," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 10(3), July.
    2. Sulaimon, Mubaraq, 2021. "Agricultural credit guarantee scheme fund (ACGSF) and agricultural performance in Nigeria: A threshold regression analysis," MPRA Paper 105564, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lim, Terence & Lo, Andrew W. & Merton, Robert C. & Scholes, Myron S., 2006. "The Derivatives Sourcebook," Foundations and Trends(R) in Finance, now publishers, vol. 1(5–6), pages 365-572, April.
    2. Fabio Pizzutilo & Francesco Cal, 2015. "Loan Guarantees: An Option Pricing Theory Perspective," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 905-909.
    3. Angoua, Paul & Lai, Van Son & Soumare, Issouf, 2008. "Project risk choices under privately guaranteed debt financing," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(1), pages 123-152, February.
    4. Akhsyim Afandi, 2009. "An ardl approach to identify bank landing channel in Indonesia," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 1(1), pages 46-59, April.
    5. Dahl, Bruce L. & Wilson, William W. & Gustafson, Cole R., 1999. "Option Values For Provisions In Export Credit Guarantees," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(2), pages 1-19, December.
    6. Abbas Ali Chandio & Yuansheng Jiang & Abdul Rauf & Fayyaz Ahmad & Waqas Amin & Khurram Shehzad, 2020. "Assessment of Formal Credit and Climate Change Impact on Agricultural Production in Pakistan: A Time Series ARDL Modeling Approach," Sustainability, MDPI, vol. 12(13), pages 1-21, June.
    7. Ruzhi Xu & Tingting Guo & Huawei Zhao, 2022. "Research on the Path of Policy Financing Guarantee to Promote SMEs’ Green Technology Innovation," Mathematics, MDPI, vol. 10(4), pages 1-24, February.
    8. Philip Vermeulen, 2002. "Business fixed investment: evidence of a financial accelerator in Europe," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(3), pages 213-231, July.
    9. Sercu, P., 1991. "Bond options and bond portfolio insurance," Insurance: Mathematics and Economics, Elsevier, vol. 10(3), pages 203-230, December.
    10. Dan W. French & Paula L. Varson & Kenneth P. Moon, 2005. "Capital Structure and the Ex‐Dividend Day Return," The Financial Review, Eastern Finance Association, vol. 40(3), pages 361-379, August.
    11. Sedef Sen & Murat Donduran, 2017. "Does stock market performance affect the government satisfaction rating in the UK?," Empirical Economics, Springer, vol. 53(3), pages 999-1009, November.
    12. Ampudia, Miguel & Georgarakos, Dimitris & Slacalek, Jiri & Tristani, Oreste & Vermeulen, Philip & Violante, Giovanni L., 2018. "Monetary policy and household inequality," Working Paper Series 2170, European Central Bank.
    13. Jacky C. So & Rakesh Bharati & Susan Crain, 2001. "Risk-Taking, Agency Problem, and Small Business Loan Guarantee: An Application of Option Pricing Theory," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 6(1), pages 24-43, Spring.
    14. Butler, J. S. & Schachter, Barry, 1996. "The statistical properties of parameters inferred from the black-scholes formula," International Review of Financial Analysis, Elsevier, vol. 5(3), pages 223-235.
    15. Duchin, R. & Sosyura, D., 2012. "Safer Rations, Riskier Portfolios : Banks’ responses to Government Aid," Other publications TiSEM e67533e7-f388-4860-b65e-0, Tilburg University, School of Economics and Management.
    16. Vermeulen, Philip, 2002. " Business Fixed Investment: Evidence of a Financial Accelerator in Europe," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(3), pages 217-235, July.
    17. Fabio Bagliano & Alessandro Sembenelli, 2004. "The cyclical behaviour of inventories: European cross-country evidence from the early 1990s recession," Applied Economics, Taylor & Francis Journals, vol. 36(18), pages 2031-2044.
    18. Dahl, Bruce L. & Wilson, William W. & Gustafson, Cole R., 1995. "Valuing Option Provisions for Export Credit Guarantees," Agricultural Economics Reports 23269, North Dakota State University, Department of Agribusiness and Applied Economics.
    19. Ledenyov, Dimitri O. & Ledenyov, Viktor O., 2015. "Wave function method to forecast foreign currencies exchange rates at ultra high frequency electronic trading in foreign currencies exchange markets," MPRA Paper 67470, University Library of Munich, Germany.
    20. Stijn Claessens & M Ayhan Kose, 2018. "Frontiers of macrofinancial linkages," BIS Papers, Bank for International Settlements, number 95.

    More about this item

    Keywords

    Credit Guarantee; Agricultural Sector; Macroeconomic environment; Nigeria.;
    All these keywords.

    JEL classification:

    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2020-02-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.