Abstract

 This study investigates the effect ofagriculturalfinancing on agricultural sector productivity in Nigeria (1981 - 2018) using the ordinary least square method which incorporates endogenity in its estimation, the unit root test was carried out for each of the variables using the ADF (Augmented Dickey Fuller) which shows that all variables i.e., PAS, AL, INRATE and REPRATE are stationary at 1st difference. The cointegraton was also conducted to determine ifthere exists a long run relationship among variables. Findingfrom the study shows that capital expenditure has a positive but insignificant impact on economic growth, recurrent expenditure has a positive and significant impact on economic growth and total revenue has a positive and a significant impact on economic growthThe firstfindings shows that there exists a positive and significant relationship between the agricultural loans in Nigeria and its agricultural output. The second finding tested the causality direction between agricultural loans and agricultural productivity in Nigeria and the finding shows no causality effect between the two variables in Nigeria. Other variables ofthe study such as interest rate and repayment rate all possessed a negative impact on agricultural output with only interest rate having an insignificant impact. The study recommends among others thatthe diversification of loans and markets in order to enhance agricultural activities which in turns impact on export competitiveness and compete in international markets, improvement in the performance ofrepayment rate of loans should be vigorously pursued, Government should endeavour to invest and initiate policy that continues to increase their stability in the economy