ISSN : 1997-1052 (Print)
2227-202X (Online)
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Impact of Bank Credit on Agricultural Production in Bangladesh: An Empirical Analysis
Nishat Tasneem, Md. Sazzad Hossain Patwary

Sustainable agricultural productivity must be ensured for the rural development and the overall development of Bangladesh. This study is aimed to assess the impact of the banking sector’s agricultural credit on agricultural productivity in Bangladesh. Secondary data from 1981-2020 has been collected from Bangladesh Bank, World Bank, Bangladesh Bureau of Statistics and Ministry of Finance. In this study, ADF Unit Root Test and Johansen Co-integration Test have been performed and further analyzed with VAR and OLS estimation. ADF test revealed that the variables are integrated at their first difference, and Johansen Co-integration Test indicated that no co-integration equation exists among the variables. VAR estimation confirms that short-run causality runs from some independent variables to the dependent variable. Finally, OLS estimation suggests that bank credit’s impact on agricultural production is strong, positive and significant. Thus, Bangladesh Bank is advised to promote more agricultural financing to the agricultural sector.

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