Microfinance and Agricultural Sector Growth in Nigeria (1990-2023)

ABSTRACTThis research work investigated “the impact of microfinance on agricultural sector in Nigeria”. The data for the study were drawn from the CBN statistical bulletin spanning from the period, 1990-2023. Agricultural sector was used as the dependent variable while Microfinance Loans, Microfinance Investments, Microfinance Savings were used as the independent variables respectively. Autoregressive Distributed Lag Model estimation method was adopted to test hypotheses one through three. The study reveals that Microfinance Loans has a positive and significant impact on Agricultural sector in Nigeria. Also, Microfinance investments has a positive and significant impact on Agricultural sector in Nigeria. It further revealed that Microfinance deposits has a positive and significant impact on Agricultural sector in Nigeria. On the basis of the findings, the research work recommended that Policy makers and financial institutions should prioritize increasing access to Microfinance loans for farmers, particularly smallholder farmers. Again, the Government agencies, private investors, and development organizations should promote Microfinance investments in agricultural infrastructure, such as irrigation systems, storage facilities, and farm-to-market roads. Furthermore, it is advised that Microfinance institutions and government agencies should encourage Microfinance savings among farmers by providing incentives, such as high-interest rates, loyalty programs, and other rewards.