Impact of agricultural credit on farmer’s income: evidence from central Punjab, Pakistan

Iqbal Javed, Ghulam Yasen, Sana Rashid, Abdul Subhan, Shoaib Akhtar, Shahbaz Ahmed, Uzma Nisar, Sobia Majeed


Access to credit had a substantial influence on farmers decisions, their income and the long-term sustainability of agriculture. This study investigated the impact of agricultural credit on farmers' income in Central Punjab, Pakistan. A conveniently chosen sample of 200 farmers from the Sargodha district was interviewed face-to-face on a structured, validated and reliable questionnaire. To explore the effect of agricultural credit along with different factors among small farmers, the Ordinary least Square (OLS) method was used. According to the results of the study for each unit increase in credit utilization, the predicted value of the dependent variable increases by approximately 6.691 units. This relationship is statistically significant at the 0.05 significance level. Other variables of age, family members and land ownership has also positive and significant impacts on the farmers' income while the variable of experience has a negative and significant impact. Policies should encourage responsible credit usage due to its proven positive and statistically significant effect on farmers' income. Such initiatives may include promoting financial literacy programs and ensuring access to affordable credit options. Agricultural credit adoption is influenced by various socioeconomic factors, which have a direct bearing on farmers' income. For the advancement of sustainable and inclusive agricultural development, policymakers should take these findings into account and design policies that facilitate credit accessibility, provide tailored financial education, and address the specific needs of diverse farming communities. 


Agricultural credit; Income; Decision; Determinants; Mix-cropping zone; OLS


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DOI: 10.33687/ijae.011.03.4896


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