The Effects Of Microfinance Banks On Agricultural Sector Performance In Nigeria (1992-2022)
Tuaneh, G. L.,
Department of Agricultural & Applied Economics, Rivers State University, Port Harcourt, Rivers State, Nigeria
Ukonu, O. E.
Department of Agricultural & Applied Economics, Rivers State University, Port Harcourt, Rivers State, Nigeria
Keywords: Agricultural Financing, Agricultural Output, Crop Output, Interest Rate
Abstract
The study examined the effects of microfinance banks on agricultural sector performance in the Nigerian economy during the period of 1982-2022. The study identified microfinance bank loan, microfinance bank deposit, microfinance bank total asset and microfinance interest rate as the dimensions of microfinance banks while agricultural output generally and for specific sectors like crop and fisheries were used as measures of agricultural sector performance Timeseries data were obtained from the CBN statistical bulletin, macrotrends, world development indicators and index mundi. The method of data analysis was the Vector Error Correction (VECM). The result showed that microfinance bank loan, microfinance bank deposit and microfinance bank total assets had negative relationship with crop output and agricultural output while microfinance bank total assets had positive significant relationship with fishery output (PV < 0.05). In the short run, the effects of microfinance variables were found to be insignificant in all cases (PV > 0.05). The study concluded that microfinance variables were significant in driving agricultural growth in Nigeria. Based on these findings, the study recommended that; deposit mobilization should be encouraged. The government should channel some assets into fishery to intensify fish production. Also, government should formulate and implement institutional strengthening policies in the areas of effective agriculture financing.