Has the agricultural credit guarantee scheme fund any impact on agricultural productivity in nigeria? a look at empirical evidence

Recognizing that agricultural production provides the needed lift upon which a sustainable development can be achieved the Federal Government of Nigeria established the Agricultural Credit Guarantee Scheme Fund (ACGSF) in 1977 specifically to provide guarantee in respect of loans granted by any bank for agricultural purposes. However, over the years, it has been argued that the scheme along with other such schemes has not actually enhanced agricultural productivity through the provisions of credit which has been a major problem to Nigeria farmers. This study, therefore, empirically examined the impact of ACGS Fund on three agricultural subsectors (crop production, livestock and fisheries) as well as on aggregate agricultural sector basis of the Nigerian economy from 1978 to 2008. Using the two-variable regression model, the study found that the ACGS Fund had positive significant impact on these three agricultural subsectors as well as on agricultural productivity. The study recommends that Government should ensure that bank claims as a result of default and borrowers’ interest draw backs are paid without delay. This will not only motivate both participating banks and farmers in the scheme but will also attract others who are skeptical about the scheme. Also, farmers should be encouraged to be applying for loans from the participating banks to enhance their agricultural activities and productivity.