The role of institutional credit in the agricultural development of Pakistan

Abstract

There has been a consensus among Pakistani policy-makers since the early 1970s that the shift from a resource-based to a science-based agriculture can be facilitated through the availability of agricultural credit. The present study brings into focus the growth of institutional credit in Pakistan. Using household level data from the Rural Credit Survey of Pakistan 1985, this study provides more rigorous evidence on the role of institutional credit in agricultural production and on the determinants of access to institutional credit. Ordinary least squares estimates are presented of the determinants of total output highlighting thus the relative importance of institutional credit in agricultural output. Maximum likelihood estimates of a probit model for determining access to institutional credit are also presented. -from Authors