The Nexus of Interest Rate Deregulation , Lending Rate and Agricultural Productivity in Nigeria

The study examined the nexus of interest rate deregulation, lending rate and agricultural productivity in Nigeria by employing co-integration and error correction techniques on annual data spanning 1986 to 2009. Nigeria has embarked on several agricultural policy measures aimed at repositioning and enhancing variables that affects the sector’s productivity. The findings from the study showed that interest deregulation had a positive and significance effect on agricultural productivity. Based on the findings, this study recommends a market determined interest as a stimulant in enhancing agricultural production. Also the government should ensure that the financial sector implements policies that will make credit available to the preferred sector, particularly to all categories of farmers and not only to bigger borrowers like the government alone because this will go a long way in boosting agricultural productivity in Nigeria. Key word: Agriculture, bank, co-integration, deregulation, error correction model, interest rate