Contribution Of Bank Credits On The Performance Of Agriculture In Mali

A strong and efficient agricultural sector has the potential to enable a country feed its growing population, generate employment, earn foreign exchange and provide raw materials for industries. It is however ironical that despite the great potentials Africa has in agricultural production; the continent is a net importer of food. Beside the problem of financing agriculture sector, the risks that faced the banking sector, the poor access to land and modern technology, the major bane of Africa’s agricultural development commonly cited in the literature is low investment or credit, Mali is not left behind. It is in the light of the above that this study examined the contribution of bank credits on the performance of agriculture in Mali. With a model of VAR from a period of 1980 to 2010. Throughout this study, we analyzed the relationship between bank loans and agricultural production in Mali. Using the econometric approach vector auto regression and granger causality test, while researching if the period of loans has a correlation with the production, we reached the conclusion that there is a relationship as long term, short term between agricultural production and bank loans. We find that the level of bank credit has a significant influence on agricultural production in Mali. By cons, long-term, short-term shocks and disturbances subside. Thus, there is an influence of bank credit growth of production in Mali. It appears a reciprocal causality Granger between bank loans and agricultural production. In other terms, the Malian bank loans have an influence on the level of investment in the agricultural sector; also, the level of agricultural production influences the decision of agriculture to borrow at near banks. The presence of causality from bank credits to production growth proves the importance of bank credit in the agricultural sector. moreover, this causality from growth in agricultural production to changing bank loans suggests that policymakers need to restructure the agricultural production system so that it can have a big influence on this financial liberalization as in industrialized countries. At the end of our study, we consider it appropriate to make some recommendations to the extent that financial liberalization in the agricultural sector to influence the growth of output at levels according to the necessities.