Agricultural Financing Mix and Poverty Reduction in Nigeria

This study investigates the impact of agricultural financing on poverty reduction in Nigeria, applying the Development Finance Theory to examine the relationship between financial systems and economic development. Agricultural financing, which includes loans, credit, insurance, and investment tailored to the needs of farmers and agribusinesses, is critical for enhancing productivity, improving livelihoods, and promoting sustainable development. Using secondary data from 2000 to 2023 sourced from the Central Bank of Nigeria (CBN), UNDP, and World Bank, this study employs a quasi-experimental research design and econometric models to analyze the influence of deposit money bank loans (DMBL), government expenditure (GEX), foreign direct investment (FDI), and other key financial variables on poverty levels. The findings reveal that increases in agricultural financing, particularly through DMBL and GEX, have a significant but complex relationship with poverty, suggesting that ineffective financial allocations may exacerbate poverty. In the long run, stable exchange rates and improved access to agricultural finance are essential for poverty alleviation. This study concludes that targeted reforms in agricultural financing policies and the optimization of financial resources are crucial for achieving sustainable economic growth and poverty reduction in Nigeria.