Effect of Commercial Banks’ Loans and Advances to Agricultural Sector on Agricultural Value Added Growth Rate in Nigeria

Abstract

This study was carried out to evaluate the effect of commercial banks’ loans and advances on agricultural sector on agricultural value added growth rate in Nigeria between 2003 and 2022 using annual time series data sourced from Central Bank of Nigeria Statistical Bulletin and World Bank Development. Agricultural value added growth rate was used as the dependent variable while commercial banks’ loans and advances to agriculture was used as the independent variable. Auto Regressive Distributed Lag (ARDL) Model was used to analyze data. The results of ARDL Model revealed that commercial banks’ loans and advances to agricultural sector had a significant positive relationship with agricultural value added growth rate in Nigeria. The researchers’ therefore recommended that Commercial banks should encourage agricultural sector value added growth by granting loans and advances when needed to intending entrepreneurs to venture in agriculture value added activities, among others.