Enhancing Smallholder Farm Productivity through Sustainable Agricultural Credit: Insights from Zarai Taraqiati Bank Limited in District Peshawar, Pakistan

Abstract

Rely of small holder farmers remains on institutional agricultural credit remains a critical determinant on farm productivity in developing countries. Several institutions like zarai taraqiati bank Limited (ZTBL) provides loans for agricultural productivity. This study evaluates the influence of agricultural credits provided by ZTBL on the income generation and farm productivity of small farmers. Among `105 respondents, 53 small holder’s farmers (≤5 acres) were randomly selected from three villages where farmers comparatively accessed credit institution more than other villages. Secondary data were collected from ZTBL. Simple statistics like frequency distribution and percentage analysis were applied before conducting paired sample t-test and effect size was estimated (Cohen’s d). Similarly, multiple regression analysis was documented to determine the pre- and post-credit changes in yield and income. It was observed that agricultural credit significantly increased wheat yield (t = 5.42, p < 0.001), maize yield (t = 4.87, p < 0.001), and annual farm income (t = 6.11, p < 0.001). Regression findings indicate that loan size, education, and timely disbursement significantly predict productivity gains (R² = 0.48). The study concludes that institutional credit enhances smallholder productivity, though delays and high interest rates constrain optimal impact. Policy reforms focusing on timely disbursement and subsidized rates are recommended.