Effects of Interest Rate Deregulation on Agricultural Financing in Nigeria from (1970 to 2014)

Abstract

The study of effects of interest rate deregulation on agricultural financing in Nigeria (1970-2014). The study alsospecifically examined the trend in the rate of interest, volume of credit to agricultural sector and agricultural GDPcontribution under the period (1970-2014). The study employed descriptive/trend statistics, ordinary least squareregression and correlation analysis to achieve its results. Secondary data used for the study were computed fromCBN Statistical bulletin 2014. The results show that interest rate has a strong influence in the volume of credit to theagricultural sector and it also has weak influence on the agricultural GDP contribution. It was also observed thatinterest rate has been fluctuating under the period (1970-2014) that have resulted to low productivity, andunemployment in agricultural sector but makes the financial institutions to be willing to disburse credit to the public.The agricultural GDP contribution has a downward and upward trend during the period which is as a result of theneglect of the government based on the discovery of oil and lastly there was an upward trend in the volume of creditto the agricultural sector, which means funds were sent to the sector by government but because of bureaucraticprocesses most farmers are unable to access it.