ABSTRACT

This study was carried out to examine the impact of banking sector on Agricultural sector in the Nigeria. The aim is to determine the relationship between banking sector and Agricultural sector in the Nigeria economy. The statistical tool of analysis is the error correction model (ECM). However, the variables were subjected to the unit root test to ensure stationary. The three variables were tested using Error correction model and all the bull Hypothesis were rejected. One percent increase in commercial Bank loan will lead to crop production has a positive relationship. An increase in interest rate by commercial Bank will decrease. Crop production by 1391.037 point. This show that interest rate of commercial Bank to crop production has a negative relationship. A one percent increase in government spending leads to 18.6% production. This shows that government spending to crop production has a positive relationship. Base on the findings, we recommended that the commercial Bank should decrease the level of interest rate, in other to encourage farmers to get loan from them. Furthermore the Agricultural credit, guarantee scheme should improve on their conductions for credit guarantee in order to make Agricultural financing attractive to commercial banks.