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Impact of credit disbursed by commercial banks on the productivity of wheat in Faisalabad district

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  • Muhammad Khalid Bashir
  • Zulfiqar Ahmad Gill
  • Sarfraz Hassan

Abstract

Purpose - The agriculture sector is the single largest contributor to the national income (gross domestic product – (GDP)) of Pakistan. Wheat is the main staple diet of the people of Pakistan. It contributes 13.7 percent to the value added in agriculture and 3.0 percent to GDP. Given its importance to the national economy, the government attaches high priority to raising agricultural productivity and farmer's income. For this purpose, financing for agricultural sector is very much needed and important. Like other institutional sources, commercial banks also provide agricultural credit. The purpose of this paper is to study the impact of credit disbursed by them on the productivity of wheat. Design/methodology/approach - Primary data were collected from 114 randomly selected respondents through a well‐structured interview schedule. Cobb Douglous function was used to calculate the impact of credit on the productivity. Findings - The coefficient of credit was highly significant, which showed that credit has a positive impact on the productivity of wheat and hence is an important tool for improving the productivity of agriculture sector. Originality/value - The study in hand will be useful for the planners who are responsible for allocating funds for the agricultural sector in general and for wheat growers in particular. The recommendations of the study will go a long way to mitigating the problems being faced by the small farmers of Pakistan in securing institutional credit.

Suggested Citation

  • Muhammad Khalid Bashir & Zulfiqar Ahmad Gill & Sarfraz Hassan, 2009. "Impact of credit disbursed by commercial banks on the productivity of wheat in Faisalabad district," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 1(3), pages 275-282, May.
    • Handle: RePEc:eme:caerpp:v:1:y:2009:i:3:p:275-282
    DOI: 10.1108/17561370910958855
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    References listed on IDEAS

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    1. M. Irfan & G. M. Arif & Syed Mubashir Ali & Hina Nazli, 1999. "The Structure of Informal Credit Market in Pakistan," PIDE-Working Papers 1999:168, Pakistan Institute of Development Economics.
    2. Muhammad Iqbal & Munir Ahmad & Kalbe Abbas, 2003. "The Impact of Institutional Credit on Agricultural Production in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 42(4), pages 469-485.
    3. Carter, Michael R., 1989. "The impact of credit on peasant productivity and differentiation in Nicaragua," Journal of Development Economics, Elsevier, vol. 31(1), pages 13-36, July.
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    Cited by:

    1. Muhammad Khalid Bashir & Yasir Mehmood, 2010. "Institutional credit and rice productivity: a case study of District Lahore, Pakistan," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 2(4), pages 412-419, November.

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