Senior Expert in Economics, Payam-e-noor University
Abstract: (6892 Views)
Bank credit is an important source for the finance in agricultural sector. Agricultural credit is expected to play a critical role in agricultural development. Since the banking system supplies lower interest loans, there is a higher demand for financing agricultural activities. Consequently due to the resource limitation, there is always excess demand in the credit market. So, implicit rationing has taken place.
The objective of this paper is to investigate the effects of agricultural credit on the major socioeconomic indicators of agricultural sector. Tobit approach is employed to model and estimate the specified empirical model. Both primary and secondary data are used in this study. The secondary data are collected through questionnaire and face to face interview with farmers.
The results show that the debt indicators, assets, promotional agricultural education, location of the farmers with respect to bank branch and family size are the main determinants of agricultural credits.
Received: 2009/11/2 | Accepted: 2010/06/28 | Published: 2010/10/2