IDEAS home Printed from
   My bibliography  Save this paper

The Impact of Institutional Credit on Agricultural Production in Pakistan


  • Iqbal, Muhammad
  • Ahmad, Munir
  • Abbas, Kalbe


Agricultural credit plays an important role in enhancing the agricultural productivity in developing countries like Pakistan. The study discusses various indicators of agricultural credit in Pakistan and presents results of estimated production function using institutional credit as one of the explanatory variables. Over the years, increased percentage of agricultural GDP has been disbursed as institutional credit. During the study period disbursement of institutional credit per cropped hectare also depicted an increasing trend in nominal terms. However, it declined in real terms from late 1980’s to early 1990s. Zarai Taraqiati Bank Limited (ZTBL)-- formerly known as Agricultural Development Bank of Pakistan (ADBP), provides the major share of institutional credit. The share of production loans in total loan advanced has been increasing during 1980-81 to 1986-87 and after mid 1990’s. It shows multiple shifts in credit policy from loans for fixed capital to advances for operational capital during the study period. The OLS estimates of the production function revealed that institutional credit affects agricultural production positively. Water availability at the farm gate, labor, and cropping intensity are the other important variables that affect agricultural output positively. However, the shocks like floods, cotton leaf curl virus (CLCV), and drought have caused significant decline in agricultural output during certain years.

Suggested Citation

  • Iqbal, Muhammad & Ahmad, Munir & Abbas, Kalbe, 2003. "The Impact of Institutional Credit on Agricultural Production in Pakistan," MPRA Paper 3673, University Library of Munich, Germany, revised 2003.
  • Handle: RePEc:pra:mprapa:3673

    Download full text from publisher

    File URL:
    File Function: original version
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Sarfraz Khan Qureshi & Akhtiar H. Shah, 1992. "A Critical Review of Rural Credit Policy in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 31(4), pages 781-801.
    2. Carter, Michael R., 1989. "The impact of credit on peasant productivity and differentiation in Nicaragua," Journal of Development Economics, Elsevier, vol. 31(1), pages 13-36, July.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Muhammad Khalid Bashir & Yasir Mehmood, 2010. "Institutional credit and rice productivity: a case study of District Lahore, Pakistan," China Agricultural Economic Review, Emerald Group Publishing, vol. 2(4), pages 412-419, November.
    2. Muhammad Khalid Bashir & Zulfiqar Ahmad Gill & Sarfraz Hassan, 2009. "Impact of credit disbursed by commercial banks on the productivity of wheat in Faisalabad district," China Agricultural Economic Review, Emerald Group Publishing, vol. 1(3), pages 275-282, May.
    3. Izhar, Ahmad & Tariq, Masood, 2009. "Impact of Institutional Credit on Aggregate Agricultural Production in India during Post Reform Period," MPRA Paper 17075, University Library of Munich, Germany.
    4. repec:taf:oaefxx:v:5:y:2017:i:1:p:1369383 is not listed on IDEAS
    5. Sial, Maqbool Hussain & Awan, Masood Sarwar & Waqas, Muhammad, 2011. "Role of Institutional Credit on Agricultural Production: A Time Series Analysis of Pakistan," MPRA Paper 31815, University Library of Munich, Germany.
    6. Sayeed, Asad. & Abbasi, Zubair Faisal., 2015. "The role of central banks in supporting economic growth and creation of productive employment : the case of Pakistan," ILO Working Papers 994874753402676, International Labour Organization.
    7. Fateh M. Mari & Heman D. Lohano, 2007. "Measuring Production Function and Technical Efficiency of Onion, Tomato, and Chillies Farms in Sindh, Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 46(4), pages 1053-1064.
    8. Odu, O.O. & Okoruwa, V.O., 2013. "Effect of Credit Constraint on Profit of Small Scale Rice-Based Farmers in Niger State, Northwestern Nigeria," 2013 AAAE Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161649, African Association of Agricultural Economists (AAAE).
    9. repec:ilo:ilowps:487475 is not listed on IDEAS

    More about this item


    institutional credit; agricultural production; production function;

    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:3673. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.