THE EFFECT OF COMMERCIAL BANK CREDIT ON AGRICULTURAL OUTPUT IN NIGERIA

                                                               ABSTRACT

The study empirical examines the impact of commercial Bank Credit on Agriculture Output: evidence from Nigeria from 1980 to 2010. Our objective is to investigate the influence of commercial bank credit on agricultural output using interest rate, money supply and deposit mobilization as checks variables. We adopted econometric method of analysis using the ordinary least squares (OLS), co integration and Error correction mechanism (Ecm). The results from the OLS revealed a positive relationship between agricultural output and commercial bank loan. However the error correction mechanism showed a slow recovery rate between agricultural output and commercial bank loans leading to the conclusion that its impact has been insignificant. Based on the findings, we recommend that monitory authorities in Nigeria should step-up their supervisory role to ensuring that commercial bank increase loan facilities to the agricultural sector of the economy also, stake holders in agrio-business should develop appropriate policy towards increasing agricultural output as it a key determinant of economic growth in Nigeria.

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