Economics

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https://hdl.handle.net/20.500.14540/33

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Browsing Economics by Subject "Agricultural credit"

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    Impact of agricultural credit finance on food production in Nepal
    (Department of Economics, 2023) Dulal, Anuj
    The institutional credit has always been perceived as a critical factor for agricultural development in Nepal through complementing working capital, easing liquidity and investment constraints. The present study has examined the trends and variations in institutional credit flow to agriculture in Nepal for the period 2005 to 2020 using compound annual growth rate. Further, impact of agricultural credit on food production was also assessed using time series data. The study is based on the secondary data collected from various published sources. Results indicated that institutional credit to agriculture in real terms has registered a significant positive growth during the past one and half decade and the highest annual growth was observed during 2007 and the overall compounding annual growth rate of sixteen year is 29.99 percent. The study further analyses the short run and long run impact of agricultural credit on food production in Nepal. This study used annual data covering the period 2005–2020. The autoregressive distributed lag (ARDL) approach is applied to explore the cointegration between underlying variables. The findings of the ARDL Long-Run Bounds Test suggest that there is long term relationship among food production, agricultural credit and cultivation land area. The empirical results reveal that food production, agricultural credit, and cultivating land area have a positive and significant impact on agricultural production in both the short-run and long-run. Therefore, the study has suggested for better access to agricultural credit to farmers for enhancing food production.It is desirable for both the government and the NRB to consider amendment current policies, investing more in actual farmers and enhance credit flow to the agriculture sector to ensure that they have access to the agricultural needs and facilities to drive agricultural transformation. Keywords: food production; agricultural credit; CAGR; ARDL approach; Nepal
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    Relationship between agricultural growth and commercial bank lending in agriculture sector in Nepalese context
    (Department of Economics, 2023) Thapaliya, Suprabha
    The World Bank has noted that in least developed countries, the agriculture sector can account for more than a quarter of GDP and is crucial for economic growth. In Nepal, the shift in national priorities towards the industrial and service sectors has resulted in a relative lack of development in the agriculture sector. However, it has been observed globally that the development of the agriculture sector can lead to overall economic development. As a result, it is important to examine whether the agriculture sector in Nepal is growing through lending from commercial banks. This study examines short term and long term effect of agricultural credit on agriculture growth in Nepal during the period of 1987-2021 using time series data. The variables considered are agricultural growth (AGDP), lending on agriculture by commercial banks (LDCBS), fertilizer supply (FER), seed supply (SEED) and irrigation supply (IRI). The regression results from ARDL cointegration test shows that lending has significant and positive long-run relationship with AGDP whereas ECM suggests that LDCBS is insignificant in short-run. The findings suggest that credit has enabled the increased use of purchased inputs and changes in the input mix, support to the evolution of agriculture over the longer horizon but it has not contributed to short-term growth in agricultural GDP. Thus, on the basis of the acquired result and few existing researches in context of Nepal, it can be said that lending towards agriculture sector is beneficial in Nepal. Solicitous plans, programs and actions are duly needed to transform agriculture sector. It is advisable for both the government and the NRB to consider revisiting current policies, increase credit flow to the agriculture sector, and investing more in actual farmers to ensure that they have access to the necessary services and facilities to drive agricultural transformation.