The impact of specialized loans of agricultural banks for small and medium enterprises (SMEs) on the financial returns of the banks in Iraq

Abstract

The financial development of a country cannot be considered complete without the financial sustainability of its financial institutions, which can be achieved by producing funds from strong investment plans and loans. Policymakers and future researchers must prioritize this element. Therefore, the current study investigates the effect of specialized loans from agricultural banks to SMEs, such as project loans, objective loans, commodity loans, and liquidity loans, on the financial performance of agricultural banks in Iraq. The study retrieved data from the databases of fifteen agricultural banks from 2011 to 2020. The relationship between variables has been examined using the Method of Moments Quantile Regression (MMQR). The results demonstrated a correlation between project financing, objective financing, commodity financing, and liquidity and the financial performance of agricultural banks in Iraq. The article guides decision-makers in the formulation of strategies to increase financial return through the use of specialty loans.