Investigating Impact of Credit on Agricultural Employment and Demand for Credit in Fars Province

Lack of access to adequate and affordable credit for investment is a handicap for farmers. Due to the increasing needs of farmers to credit, determining their credit demands, recognizing the impacts of credit on employment as well as willingness of farmers to obtain loans from informal sources are important. In this study, The results reveal that there is no causality relationship between employment and credit but employment is caused by credit. The results also indicate a correlation between demands for credit and output prices. Farmers are more motivated to invest on their activities with increasing the prices. Demand for credit has an indirect relationship with interest rate; however, interest rate does not directly impact the demand for credit.