Bridging Finance and Farming: Evidence on the Association between Financial Inclusion and Agricultural Performance in Southwest Bangladesh

The objective of this study is to investigate the association of financial inclusion on agricultural output in the research region. Meherpur Sadar in the Meherpur district and Chuadanga Sadar in the Chuadanga district comprise the two upazilas that form the research area. A systematic random sample strategy is used to gather data from 100 farmers who live in this area. The data, which includes information on agricultural production and farmers' opinions on several facets of financial inclusion, is collected in both continuous and categorical forms. The elasticity of output and marginal product of the physical inputs needed for agricultural production are estimated using the translog production function. The farmers' opinions on the advantages of financial inclusion in their farming operations are also ascertained by principal component analysis. The study's conclusions show that having a bank account and having credit access facilities have a significant association with agricultural productivity. Additionally, the data shows that fertilizer produces higher marginal productivity, while labor exhibits a greater level of output elasticity in relation to seed, fertilizer, and pesticide. Additionally, the use of pesticides and fertilizers together improves output. The qualitative research shows that financial inclusion improves output and lowers farmer poverty. However, the lack of sufficient collateral to sustain bank loans is a significant obstacle. Expanding banking facilities in rural regions under appropriate supervision can successfully address these issues