Determinants of Agricultural Credit Utilization among Small Farm Holders: An Evidence from Southern Punjab, Pakistan

The agricultural credit has a significant impact on agricultural productivity. Credit constraints should be reasonably minimized so that small farmer can easily get loans. This study investigates the determinants of utilization of agricultural credit among small farm holders in southern Punjab, Pakistan. A total sample of 200 small farmers is selected for data collection. An appropriate pretested questionnaire was used for data collection. The data collection was done by tanking direct interviews by using a convenient sampling technique. District Multan was selected from the southern Punjab of Pakistan. A binary logit model was used to examine the effect of various factors on the adoption of agricultural credit utilization among small farm holders. The binary logit model's results showed that the variables of farmers' qualification, farming experience, family members, agricultural income, and tenant cum owner positively and significantly impact agricultural credit utilization. Agricultural land has a negative and significant influence on agricultural credit utilization. The study's results suggest that government should educate small farmers about the positive impact of credit utilization on their agricultural production.