Financial Inclusion and Agricultural Productivity in Nigeria

There has been a constant debate about the efficacy of financial inclusion of the rural dwellers, especially farmers, as a tool for promoting agricultural productivity of the country at this period when the country strives toward improves food production to stem the menace of the rising cost of feeding. However, these debates have been indecisive, given the conflicting results that arises from several studies. This study was thus embarked upon to take a stand and shed more light on the efficacy of financial inclusion as a potent tool for improving agricultural output in Nigeria. The study used secondary data which spanned 1980 to 2023 sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin, 2023 edition. The data collected were analyzed using Autoregressive Distributed Lag after confirming the stationarity property of the variables involved and discovered that all were combinations of I(0) and I(1). Heteroscedasticity and Cointegration tests which equally confirmed existence of cointegration among the independent variables were carried out to standardize the result of the findings. From the findings it was revealed that loans and advances of commercial banks bring to bear a positive and significant effect on agricultural outputs in Nigeria. It was therefore recommended, among others, that commercial banks in rural areas should continue to make loans and advances available to agricultural sector with non-strict conditionality and ensure that they are used for the purpose for which they are meant for and not diverted to other purposes; also the establishment of more rural bank branches should be enhanced to give farmers more easy access to it and be encouraged to save thus improving their financial inclusion and hence agricultural productivity.