Impact of commercial bank lending on agricultural production and productivity in Nigeria

Provision of financial support for agriculture has been a prime intervention strategy for poverty reduction. The study analyzed the impact of commercial bank lending on agricultural production and productivity in Ondo and Ekiti State of Nigeria. Descriptive statistics, gross margin, elasticity of production, return to scale as well as regression analysis were used to analyze the data. The result showed that majority of the respondents (89.2%) were male, married (92.5%), educated (84.2%) and the amount of loan range from N10,000 to N100,000. The regression result revealed that labour cost is significant to all categories of farmers at 5% and the elasticity of production with respect to labour cost was decreasing positive function to labour, for all the farms were operating in the rational zone of production with respect to labour and it was efficiently utilized that is 0˂ Ep labour ˂ 1, while return to scale were technically efficient, with only EKBN were technically inefficieny. The Ondo State Non-Beneficiaries made higher gross margin because majority of them enjoyed other credit sources outside the banking sector. The EKB made higher gross margin per hectare (₦26,246.35) than the EKNB who made an average of ₦9,896.99. It was therefore recommended that there should be active involvement of government and the private sector at boosting in flow of funds into agriculture and agribusiness.