Assessing the Effectiveness of Agricultural Credit Policies on Farm Productivity in Pakistan: Evidence from the Punjab Region

Ali  Raza; Syed Hassan Muhammad  Zaidi; Erum  Khan; Asad  Ullah

doi:10.63056/academia.5.3(s4).2026.1936

Authors

Ali Raza School of Public Policy, Pakistan Institute of Development Economics (PIDE), Islamabad Author
Syed Hassan Muhammad Zaidi School of Economics and Management, Jiangsu University of Science and Technology, China Author
Erum Khan Department of Agriculture, Food and Environment, University of Catania, Italy Author
Asad Ullah Institute of Horticultural Sciences, University of Agriculture Faisalabad, Pakistan Author

DOI:

https://doi.org/10.63056/academia.5.3(s4).2026.1936

Keywords:

agricultural credit, farm productivity, Punjab, Pakistan, formal credit, informal credit, rural finance, smallholder farmers, credit policies, shelf life of credit

Abstract

This study measures the impact of agricultural credit policies on farm productivity in the Punjab province of Pakistan. Applying a mixed methodological approach to analyzing survey data collected at the farm level and information from institutions, the study examines how formal and informal credit affect wheat productivity, farm income, and rural households. This study shows that while agriculture credit does have a significant effect on productivity, it has a higher impact on large farms than small farms. The effectiveness of agriculture credit is largely dependent on the shelf life conditions at the institutional level, such as interest rates, terms of payment, provision of extension services, and accessibility to markets. The study indicates some limitations for the effectiveness of agricultural credits, such as lack of proper targeting, policy fragmentation, and insufficient post credit services, limiting their ability to positively impact poor households in the countryside.