Impact of micro loans on agricultural production: A case study of wheat production in Bahawalpur, Pakistan

This study aims to investigate the role of Zarai Taraqiati Bank's limited finance through technology adaptation on wheat productivity in Bahawalpur, Pakistan. Lack of resources and technology are the main reasons why a lot of underdeveloped economies are not able to fulfill their potential especially in agriculture, which is generally the prime income source and occupation. This study is based on a primary data source collected through a field survey. The simple random sampling and cluster random sampling technique is employed for deriving representative sample from population to establish the relationship response variable and focus variables while controlling for land holding and farmer education. It is concluded that agriculture financing through high-yielding varieties, fertilizer, tractors, and harvesters have a significant impact on wheat productivity. The long-term loans also made a marked impact on wheat productivity, while the household size and education are negatively associated with wheat productivity, but these variables are insignificant. The positive association between long-term loans and agricultural productivity represents that credit enables the farmers to purchase superior quality inputs and equipment which causes an increase in agricultural yield. The study suggests that the in-time provision of the appropriate amount of loan and credit in kind (i.e., fertilizer, tractor etc.) to farmers may increase productivity. As a result, income and assets of the farmers are also enhanced.