The high-quality development of agricultural enterprises lays a solid foundation for rural revitalization and promotes common prosperity among farmers, while the enterprises have financial needs for their own development. The article matches the data of Chinese agricultural enterprises from 1998 to 2015 with information on financial licenses to explore the impact and mechanisms of banking competition on the productivity growth of agricultural enterprises. The results show that banking competition improves the productivity of agricultural enterprises, and the conclusion remain robust after considering measurement errors and endogeneity issues. The analysis of the impact mechanism shows that banking competition improves the productivity of agricultural enterprises by promoting loan availability. Heterogeneity analysis shows that competition in the banking industry has a stronger promoting effect on the productivity of small and medium-sized enterprises compared to large enterprises, and a greater promoting effect on the productivity of established enterprises compared to new enterprises. Banking competition has a greater promoting effect on the productivity of private enterprises compared to state-owned and foreign-funded enterprises. Meanwhile, factors such as asset size, current assets, capital intensity, and debt levels have a significant impact on productivity. These findings provide policy implications for optimizing the rural financial system and promoting rural industrial revitalization.