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The Impact of Agricultural Credit on Economic Activity for Egyptian Agricultural Sector
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Abstract: ـــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــ
• Egyptian Journal of Agricultural Economics. Egyptian Association of Agricultural Economics. Vol.(26), No.(2), Cairo, Egypt, June 2016.
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Despite of the importance of the agriculture sector, its contribution to the GDP is limited compared to other sectors, where the proportion of the contribution of the agricultural gross domestic product fell in GDP from about 17.4% in 90/1991 to about 11.2% in 2014/2015, compared to approximately 16.6% of the industry manufacturing and 12.8% for the petroleum sector 0.13% to trade sector in 2014/2015.
Decline in the contribution of the agricultural sector in GDP to many problems facing the agricultural sector is due, it is the most important agricultural possessor structure and the nature of agricultural production. In addition to the limited bank funding directed to this important sector, which is characterized by limited financial resources and the modest investments .then The provision of credit services important need to do different agricultural activities, Which it is a challenge facing the agricultural sector and an obstacle in the face of development despite the importance of the agricultural sector and its ability to create an opportunities for employment . The research examines the impact of the agricultural credit on agricultural economic activity in Egypt during the period (1990/1991-2014/2015), by using VAR model .
Two variables are chosen for this research : real agricultural (GDP) as an important indicator for measuring the average of economic activity for agricultural sector and real agricultural credit. Some major tests, such as: Johansen test, Granger causality test, variance decomposition analysis, and impulse response functions, were applied in this research.
The results of the research indicate that there is a mono effect relationship moving from the agricultural credit. to the agricultural GDP and a long-running equilibrium relationship between these variables. Results also indicate that there is little agricultural credit explanatory power for explaining the changes in the agricultural GDP. In general, the results show a positive effect of the agricultural credit to the economic activity for agricultural sector.
Recommendations:
1- It’s necessary to raise the credit efficiency by the central bank to take a package of measures to help in the promotion of the credit process, such as a review of credit facilities granted and obstacles facing the credit process in terms of facilitating the procedures, reducing the interest rate on long-and medium-sized investment lending rates to encourage many who want to borrow, reducing Administrative expenses .
2- Solve the problem of the lack of traditional collateral using secure alternatives based on the personal qualities of the individual.
3- Modify each of the value of loans and the repayment period so that they are suitable for each area of agricultural fields.
4- Work on extending credit services more broadly to the governorates of Upper Egypt.
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| URL |
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| Publication year |
2016
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| Availability location |
مكتبة معهد بحوث الاقتصاد الزراعي-7 ش نادى الصيد - مبنى الهيئات والشركات - الدقي- الجيزة (الدور الرابع)
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| Availability number |
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| Organization Name |
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| City |
الجيزة
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| serial title |
المجلة المصرية للاقتصاد الزراعى
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| Author(s) from ARC |
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| Publication Type |
Journal
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