Back to the Land: The Impact of Financial Inclusion on Agriculture in Nigeria


School of Management & Social Sciences, Pan-Atlantic University, Lagos, Nigeria



an rural financial inclusion enhance agricultural growth? This study, using annual data over the period 1981-2014 and the ARDL bounds testing approach, captures the long run as well as the short-run dynamics of the relationship between financial inclusion and agriculture in Nigeria. The results show that usage of financial services has significant impacts on agriculture both in the short and the long run, meaning that for sustainable agricultural development in rural areas, improving financial inclusion is critical. On the contrary, access to finance has insignificant impacts on agricultural growth. The message is: While provision of access to finance to rural farmers could have many benefits, it is more important to consider the usage of the finance in the rural settings and its impact on rural outcomes that we care about. There is a need for more traditional and non-traditional financial service providers to go back to the land and innovate in the Nigerian agricultural space in order to boost financial inclusion in Nigeria while also substantially reducing poverty and stimulating agricultural growth. 


Acha, I. A. (2012). Non-Bank Financial Institutions and Economic Development in Nigeria. International Journal of Finance and Accounting, 1(2), 14-22.

Adeola, O., & Evans, O. (2017a). The Impact of Microfinance on Financial Inclusion in Nigeria. The Journal of Developing Areas, 51(4), 193-206.

---------- (2017b). Financial Inclusion, Financial Development, and Economic Diversification in Nigeria. The Journal of Developing Areas, 51(3), 1-15.

Banerjee, A. V., Duflo, E., Glennerster, R., & Kinnan, C. (2013). The Miracle of Microfinance? Evidence from a Randomized Evaluation. Retrieved from

Beck, T., & Demirgüç-Kunt, A. (2008). Access to Finance: An Unfinished Agenda. The World Bank Economic Review, 22(3), 383-396.

Bentzen, J., & Engsted, T. (2001). A Revival of the Autoregressive Distributed Lag Model in Estimating Energy Demand Relationships. Energy, 26(1), 45-55.

Binswanger, H. P., & Khandker, S. R. (1995). The Impact of Formal Finance on the Rural Economy of India. The Journal of Development Studies, 32(2), 234-262.

Burgess, R., & Pande, R. (2003). Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment. The American Economic Review, 95(3), 780-795.


Chaddad, F. R., Cook, M. L., & Heckelei, T. (2005). Testing for the Presence of Financial Constraints in US Agricultural Cooperatives: An Investment Behavior Approach. Journal of Agricultural Economics, 56(3), 385-397.

 Das, A., Senapati, M., & John, J. (2009). Impact of Agricultural Credit on Agriculture Production: An Empirical Analysis in India. Reserve Bank of India Occasional Papers, 30(2), 75-107.

Dorfman, J. H., & Lastrapes, W. D. (1996). The Dynamic Responses of Crop and Livestock Prices to Money-Supply Shocks: A Bayesian Analysis Using Long-Run Identifying Restrictions. American Journal of Agricultural Economics, 78(3), 530-541.

EFInA. (2016). Financial Inclusion. Retrieved 21 March, 2016, from

Elliot, B. E., Rothenberg, T. J., & Stock, J. H. (1996). Efficient Tests of the Unit Root Hypothesis. Econometrica, 64(8), 13-36.

Evans, O. & Lawanson, O. (2017) A Multi-Sectoral Study of Financial Inclusion and Economic Output in Nigeria. Ovidius, University Annals, Economic Sciences Series, XVII (1/2017), 195-204.

Evans, O. (2016). The Effectiveness of Monetary Policy in Africa: Modeling the Impact of Financial Inclusion. Iranian Economic Review, 20(3), 327-337.

---------- (2015). The Effects of Economic and Financial Development on Financial Inclusion in Africa. Review of Economic and  Development Studies, 1(I), 17-25.

Evans, O., & Adeoye, B. (2016). The Determinants of Financial Inclusion in Africa: A Dynamic Panel Data Approach. University of Mauritius Research Journal, 22, 310-336.

Ghatak, S., & Siddiki, J. U. (2001). The Use of the ARDL Approach in Estimating Virtual Exchange Rates in India. Journal of Applied statistics, 28(5), 573-583.

Golait, R. (2007). Current Issues in Agriculture Credit in India: An Assessment. Reserve Bank of India Occasional Papers, 28(1), 79-99.

Hye, Q. M. A. (2009). Money Supply and Agricultural Prices: A Causality Analysis for Pakistan Economy (Quarterly Data Analysis). Journal of Agricultural Research, 47(2), 193-199.

Johansen, S., & Juselius, K. (1990). Maximum Likelihood Estimation and Inference on Cointegration—With Applications to the Demand for Money. Oxford Bulletin of Economics and statistics, 52(2), 169-210.

Karlan, D., & Zinman, J. (2009). Expanding Microenterprise Credit Access: Using Randomized Supply Decisions to Estimate the Impacts in Manila. The Review of Financial Studies, 23(1), 433-464.

Kwiatkowski, D., Phillips, P. C., Schmidt, P., & Shin, Y. (1992). Testing the Null Hypothesis of Stationarity against the Alternative of a Unit Root: How Sure Are We that Economic Time Series Have a Unit Root? Journal of Econometrics, 54(1), 159-178.

Maitra, P., Mitra, S., Mookherjee, D., Motta, A., & Visaria, S. (2017). Financing Smallholder Agriculture: An Experiment with Agent-Intermediated Microloans in India. Journal of Development Economics, 127, 306-337.

---------- (2014). Financial Inclusion for Agricultural Growth: An Alternative Approach. Retrieved March 23, 2016, from

Nelson, C. R., & Plosser, C. R. (1982). Trends and Random Walks in Macroeconomic Time Series: Some Evidence and Implications. Journal of Monetary Economics, 10(2), 139-162.

Obilor, S. I. (2013). The Impact of Commercial Banks’ Credit to Agriculture on Agricultural Development in Nigeria: An Econometric Analysis. International Journal of Business, Humanities and Technology, 3(1), 85-94.

Orden, D. (1986). Money and Agriculture: the Dynamics of Money-Financial Market-Agricultural Trade Linkages. Agricultural Economics Research, 38(3), 14-28.

Ouattara, B. (2004). Modelling the Long Run Determinants of Private Investment in Senegal. Credit Research Paper, 04/05, Retrieved from

Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds Testing Approaches to the Analysis of Level Relationships. Journal of Applied Econometrics, 16(3), 289-326.

Pradhan, N. C. (2013). Persistence of Informal Credit in Rural India: Evidence from All-India Debt and Investment Survey and Beyond. Munich Personal RePEc Archive Paper, 80381, Retrieved from

Rakesh, M. (2006). Economic Growth, Financial Deepening and Financial Inclusion. In M. Sharma (Eds.), Dynamics of Indian Banking (92-120). New Dehli: Atlantic.

Saibu. O., Alenoghena. R., Evans, O., & Tewogbade, S. (2016). Determinants of Stock Trading Volume in Nigeria: Money Demand Approach. Journal of Empirical Economics, 5(2), 74-89.

Sarkar, J. (1999). India's Banking Sector: Current Status, Emerging Challenges, and Policy Imperatives in a Globalized Environment. India: Oxford University Press.

Sarma, M., & Pais, J. (2008). Financial  Inclusion and Development: A Cross Country Analysis. Retrieved from

Schultz, T. W. (1980). Nobel Lecture: The Economics of Being Poor. The Journal of Political Economy, 88, 639-651.

Sial, M. H., Awan, M. S., & Waqas, M. (2011). Institutional Credit and Agricultural Production Nexus. Munich Personal RePEc Archive Paper, 30932, Retrieved from

Toby, A. J., & Peterside, D. B. (2014). Analysis of the Role of Banks in Financing the Agriculture and Manufacturing Sectors in Nigeria. International Journal of Research in Business Management, 2(2), 9-22.

USAID. (2011). Rural and Agricultural Finance Taking Stock of Five Years of Innovations. microREPORT #181.