Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

Impact of Agricultural Financing on Economic Performance and Food Security: Evidence from Nigeria

Gambo Zakari, Zakari Fatima Saidu, Zulaiha Jaafar Bana, Aisha Kabir Ahmad, Hauwau Yakubu Dauda, Sulaiman Aliyu Daba

Abstract

Agricultural financing remains a critical determinant of economic performance and food security in developing economies. This paper examines the impact of agricultural credit mechanisms including commercial banks, microfinance institutions, and cooperatives on productivity, GDP growth, and food security outcomes in Nigeria. Through a comprehensive review of literature and analysis of key agricultural financing programs, the study reveals that access to credit significantly enhances agricultural productivity and contributes to food security. However, challenges such as high interest rates, collateral requirements, and limited rural banking infrastructure constrain the effectiveness of these mechanisms. The paper recommends policy interventions to improve credit access, strengthen institutional capacity, and enhance the sustainability of agricultural financing systems.

Keywords

Agricultural financingfood securityeconomic performanceNigeriamicrofinancecooperatives

References

Abedullah, Kouser, S., & Qaim, M. (2022). Agricultural credit and productivity: Evidence from developing countries. Agricultural Economics, 53(2), 234-249. https://doi.org/10.1111/agec.12698 Adebayo, O., & Adekunle, O. A. (2022). Comparative analysis of state-level agricultural credit schemes in Nigeria. African Journal of Agricultural Economics and Rural Development, 10(1), 45-62. Adebayo, S. A., Abimbola, O. H., & Omotesho, K. F. (2023). Gender disparities in agricultural credit access and utilization in southwestern Nigeria. Gender, Technology and Development, 27(1), 89-105. https://doi.org/10.1080/09718524.2023.2167890 Adekunle, C. P., Akinola, A. A., & Shittu, A. M. (2021). Agricultural credit and economic growth nexus: Evidence from Nigeria. International Journal of Agricultural Management and Development, 11(4), 456-471. Adeleke, O. A., Akinpelu, S. A., & Olutunmogun, A. K. (2021). Governance challenges in Nigerian agricultural cooperatives. Journal of Co-operative Organization and Management, 9(2), 100127. https://doi.org/10.1016/j.jcom.2021.100127 Adeola, O., & Evans, O. (2021). Financial inclusion and agricultural development in Nigeria: The role of commercial banks. Financial Innovation, 7(1), 1-23. https://doi.org/10.1186/s40854-021-00256-3 Adeola, R. O., & Evans, O. (2023). Financial literacy and credit access among smallholder farmers in Nigeria. Cogent Economics & Finance, 11(1), 2176543. https://doi.org/10.1080/23322039.2023.2176543 Adetiloye, K. A., Eke, P. O., & Akinola, O. A. (2021). Agricultural financing and rural development in Nigeria: Challenges and prospects. AGRIS on-line Papers in Economics and Informatics, 13(1), 3-14. https://doi.org/10.7160/aol.2021.130101 Adjognon, G. S., Liverpool-Tasie, L. S. O., & Reardon, T. A. (2021). Agricultural input credit in Sub-Saharan Africa: Telling myth from facts. Food Policy, 67, 93-105. https://doi.org/10.1016/j.foodpol.2021.02.003 Afolabi, J. A., Olagunju, K. O., & Fakayode, S. B. (2022). Impact of agricultural credit on farm employment in southwestern Nigeria. Agricultural Finance Review, 82(3), 445-462. https://doi.org/10.1108/AFR-07-2021-0089 Agricultural Credit Guarantee Scheme Fund [ACGSF]. (2023). Annual report and statement of accounts. ACGSF Agricultural Credit Guarantee Scheme Fund [ACGSF]. (2024). Performance statistics 2023. ACGSF Agunbiade, O., & Adeyemi, O. R. (2022). Interest rate structures and agricultural credit access in Nigeria. Journal of Agriculture and Rural Development in the Tropics and Subtropics, 123(1), 85-97. Ahmadu, J., & Akande, T. (2021). Evaluation of the Commercial Agriculture Credit Scheme in Nigeria. Journal of Agriculture and Food Research, 4, 100145. https://doi.org/10.1016/j.jafr.2021.100145 Ajao, A. O., & Ogunniyi, L. T. (2021). Contract enforcement and agricultural credit markets in Nigeria. African Development Review, 33(2), 245-258. https://doi.org/10.1111/1467- 8268.12478 Ajibefun, I. A., & Abdulkadri, A. O. (2021). Sustainability assessment of agricultural credit programs in West Africa. Sustainability, 13(18), 10245. https://doi.org/10.3390/su131810245 Akerele, D., Momoh, S., Adetoro, M. A., Adekunle, C. P., & Aromolaran, A. B. (2022). Dietary diversity and its determinants among rural farming households in southwest Nigeria. International Journal of Food and Agricultural Economics, 10(1), 37-51. Akinola, B. D., Mgbenka, R. N., & Aleke, S. O. (2022). Effects of formal credit on productivity of cassava-based farmers in Southeast Nigeria. African Development Review, 34(1), 102-114. https://doi.org/10.1111/1467-8268.12578 Akinola, W., & Onuoha, K. (2023). Digital financial services adoption among rural farmers in Nigeria: Barriers and prospects. Electronic Commerce Research and Applications, 57, 101217. https://doi.org/10.1016/j.elerap.2023.101217 Akintunde, O. K., Adeyemo, R., & Ogunleye, K. Y. (2023). Risk perceptions and agricultural lending by commercial banks in Nigeria. International Journal of Agricultural Management, 12(1), 45-58. Amare, M., & Shiferaw, B. (2023). Agricultural credit and smallholder resilience to climate shocks in Sub-Saharan Africa. Climate and Development, 15(2), 156-171. https://doi.org/10.1080/17565529.2022.2067367 Amaza, P. S., Umeh, J. C., Helsen, J., & Adejobi, A. O. (2020). Determinants and measurement of food insecurity in Nigeria: Some empirical policy guidelines. Journal of Food, Agriculture and Environment, 4(2), 275-280. Amos, S. O., Nmadu, J. N., Marcus, P. L., & Kyagya, I. Z. (2023). Impact of agricultural credit on farm income of smallholder farmers in North Central Nigeria. Journal of Agricultural Extension, 27(1), 103-115. https://doi.org/10.4314/jae.v27i1.11 Aromolaran, A. O., & Olaniyan, A. B. (2021). Does access to credit improve household food security? Evidence from southwestern Nigeria. Food Security, 13(4), 1003-1019. https://doi.org/10.1007/s12571-021-01169-5 Awotide, B. A., Karimov, A. A., & Diagne, A. (2022). The impact of seed vouchers on poverty reduction among smallholder rice farmers in Nigeria. Agricultural Economics, 53(5), 647-662. https://doi.org/10.1111/agec.12702 Ayinde, O. E., Olabode, O. S., Oyewole, S. O., & Adewumi, M. O. (2022). Determinants of access to agricultural credit among rice farmers in southwestern Nigeria. Asian Journal of Agriculture and Rural Development, 12(3), 189-198. https://doi.org/10.18488/5005.v12i3.5092 Babatunde, R. O., Salami, M. F., & Mohammed, B. T. (2021). Impact of off-farm income on food security and nutrition in Nigeria. Food Policy, 101, 102079. https://doi.org/10.1016/j.foodpol.2021.102079 Bank of Agriculture [BOA]. (2024). Strategic plan 2024-2028. BOA Nigeria. Barrett, C. B. (2020). Measuring food insecurity. Science, 327(5967), 825-828. https://doi.org/10.1126/science.1182768 Central Bank of Nigeria [CBN]. (2023). Agricultural financing initiatives: Impact assessment report. CBN. Central Bank of Nigeria [CBN]. (2024). Statistical bulletin 2023. CBN. Chandio, A. A., Jiang, Y., Wei, F., & Guangji, T. (2022). Does financial development enhance agricultural production in Pakistan? An analysis based on both aggregate and disaggregate data. Journal of Asian Business and Economic Studies, 29(1), 3-22. https://doi.org/10.1108/JABES-10-2020-0116 Diao, X., Hazell, P., & Thurlow, J. (2020). The role of agriculture in African development. World Development, 38(10), 1375-1383. https://doi.org/10.1016/j.worlddev.2020.01.007 Ecker, O., & Nene, M. (2022). Nutrition policies in developing countries: Challenges and highlights. IFPRI Discussion Papers, 2145, International Food Policy Research Institute. Emenike, C. O., & Onyenweaku, C. E. (2021). Sustainability challenges of microfinance institutions in agricultural financing in Southeast Nigeria. Journal of Agricultural Extension and Rural Development, 13(2), 89-99. https://doi.org/10.5897/JAERD2021.1247 Eze, A. V., & Ibekwe, U. C. (2021). Determinants of agricultural loan repayment performance among farmers in Abia State, Nigeria. International Journal of Food and Agricultural Economics, 9(2), 141-153. Fadare, O., Akerele, D., Teboh, T., & Aderibigbe, R. O. (2022). Maternal nutrition knowledge and child nutritional status in southwestern Nigeria. BMC Public Health, 22(1), 456. https://doi.org/10.1186/s12889-022-12845-x Fadare, O., Zanello, G., & Srinivasan, C. (2023). Agricultural commercialization and dietary diversity: Evidence from Nigerian farming households. Food Security, 15(1), 167-183. https://doi.org/10.1007/s12571-022-01311-8 Feder, G., Lau, L. J., Lin, J. Y., & Luo, X. (2020). The determinants of farm investment and residential construction in post-reform China. Economic Development and Cultural Change, 41(1), 1-26. https://doi.org/10.1086/452001 Food and Agriculture Organization [FAO]. (2024). The state of food security and nutrition in the world 2024. FAO. Hassan, M. B., & Akande, S. O. (2023). Funding mechanisms for agricultural development programs in Nigeria: Sustainability perspectives. Afric

More Articles from IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH

Effect of Monetary Policy on Profitability of Deposit Money Banks in Nigeria

Author: Stephanie Nguhemen Gbande, Mike T. Soomiyol, Timothy Tyona, Gaius Msendoo Asombo

Cognitive Diversity and Performance of Deposit Money Banks in Nigeria

Author: 1Nwangwu, Okwudiri Iheanyi, 2 Pepple, Grace Jamie PhD

Banking Innovations and Industrial Sector Performance in Nigeria: Evidence from ARDL Model

Author: Peter Ngbede Ajam, Abiodun Edward Adelegan, Benson Emmanuel

Environmental Sustainability and Entrepreneurial Performance in Nigeria: A Case Study of Enugu State

Author: i, Azolike Nkiru Nkechi, ii, Okwor Emmanuel Ejimnkonye, iii, Eneaniofu Daniel Mmaduakonam