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A micro-level analysis of the intensity of agricultural finance supply in Nigeria: empirical evidence

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  • Yusuf Ibrahim Kofarmata

    (Yusuf Maitama Sule University Kano)

  • Abubakar Hamid Danlami

    (Bayero University Kano)

Abstract

Agricultural credit provides access to all other resources, which may lead to remarkable improvement in agricultural productivity. This study aims to model the determinants of credit supplied to farmers by microfinance banks. A total of 835 households and 45 microfinance banks were utilized as the samples of the study. The result of the Tobit model shows that the entrepreneurial ability of the farmers, having an account with the bank, profits from loan and the number of marketing staff of the banks have positive impacts on loan supply. Contrarily, the higher the distance of customers from the banks, the lower the intensity of loan supply. The study recommends that pro-poor credit policies are required for the establishment of new agencies and financial institutions devoted to agricultural sector. Such financial agencies should be established closer to farmers especially those in remote areas. Moreover, policies should focus on rural development through the activities that could generate off-seasonal employment.

Suggested Citation

  • Yusuf Ibrahim Kofarmata & Abubakar Hamid Danlami, 2021. "A micro-level analysis of the intensity of agricultural finance supply in Nigeria: empirical evidence," SN Business & Economics, Springer, vol. 1(1), pages 1-17, January.
    • Handle: RePEc:spr:snbeco:v:1:y:2021:i:1:d:10.1007_s43546-020-00011-y
    DOI: 10.1007/s43546-020-00011-y
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    More about this item

    Keywords

    Agricultural; Finance supply; Determinants; Tobit;
    All these keywords.

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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