IMPACT OF BANK CREDIT ON AGRICULTURAL PRODUCTIVITY: EMPIRICAL EVIDENCE FROM NIGERIA (1981-2015)

We examined the effect of bank credit on agricultural productivity in Nigeria so as to ascertain the existence of causal relationship between the dual. To achieve this objective, the time frame secondary data used in the study includes: written materials such as books and journals and also the use of time series data such as Agricultural Gross Domestic Product (AGDP), commercial bank credit to agricultural sectors (CBCA), Interest rate charges (INT), Government spending on agriculture (GSA), and Agricultural Credit Guarantee scheme (ACGSF).THE DATA collected were all sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin. The statistical tool of analysis is the Toda and Yamamoto granger non causality techniques. Conversely the variables were exposed to the Unit Root Test to ensure stationarity both with and without structural break, the Johansen Co-Integration Test which showed that a long term relationship does not exist among variables and also the Vector Autoregression Estimates Decompositions Test was also computed to shows the contribution of each endogenous variable to the forecast of other variables before the application of the Toda and Yamamoto non granger causality test to determine if a causal relationship exist among variable of which the result attained was that there is a unidirectional causality running from ACGSF to AGDP thereby buttressing the estimate of the VAR model with respect to the role of ACGSF in explaining changes toAGDP. No other causality is found to run from AGDP to any other variable and vice versa