A Comparative Analysis of the Use of Microfinance and Formal and Informal Credit by Farmers in Less Developed Areas of Rural China

Jia, Xiangping; Luan, Hao; Huang, Jikun; Li, Zuowen

doi:10.1111/dpr.12100

Cited by 16 publications

(21 citation statements)

References 15 publications

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“…The finding is interesting. More specifically, Jia et al [79] pointed out that formal credit was mainly used for farmland production. However, this study found that formal agricultural credit did not significantly reduce farmland abandonment.…”

Section: Discussionmentioning

confidence: 99%

Power of Agricultural Credit in Farmland Abandonment: Evidence from Rural China

Zeng

Xie

et al. 2019

Land

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Labor, land, and funds are keys to revitalizing rural areas around the world. Previous studies have focused on the impacts of funds on agricultural production, but placed little emphasis on its role in agricultural land-use transformation. Thus, this study explores the quantitative relationship between agricultural credit and farmland abandonment from the perspective of rural revitalization. Using data on 8031 households from 27 provinces obtained from China’s Labor Force Dynamics Survey (CLDS), this study uses a Tobit model to examine the quantitative impacts of informal and formal agricultural credit on farmland abandonment. The results indicate that: (1) Access to agricultural credit helps to reduce farmland abandonment. (2) Compared with formal agricultural credit (provided by institutions), informal agricultural credit (provided by family and friends) is more significant in reducing farmland abandonment. Thus, this study enhances our understanding of the relationship between agricultural credit and farmland use. It will also prompt policymakers to improve rural financial markets in order to reduce the misallocation of farmland resources, thereby improving food security and rural economies.

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Section: Discussionmentioning

confidence: 99%

Power of Agricultural Credit in Farmland Abandonment: Evidence from Rural China

Zeng

Xie

et al. 2019

Land

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“…In China, state-owned formal financial institutions such as the Agricultural Bank of China and the Rural Credit Cooperative dominate institutional lending in rural economies. These are heavily subsidised by the government to support agricultural production [40]. Although the demand for credit is immense and has significantly increased in recent years, the use of formal finance is stagnating [34,40,41].…”

Section: Formal Credit With Collateralmentioning

confidence: 99%

The Alfredo Namitete Agroecology Credit System: A New Business Model That Supports Small-Scale Lending

Hilmi

2019

Sustainability

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A major obstruction in the development of sustainable agriculture is the weakness of the financial and banking sectors in supporting smallholder farming. While farmers need to invest in their farms, they struggle to find credit schemes adapted to their specific needs. This study explores the literature on a range of credit systems applied in different geographical and historical contexts to analyse the underlying drivers of their successes or otherwise. In light of this review, the study investigates a farmers’ association, Alfredo Namitete (AN), in Mozambique, offering a range of agroecology credit modalities. It is then assessed as to whether a new business model initiated with seed funding could be self-managed by the association itself and lead to greater autonomy. The AN pilot tested three schemes between 2015 and 2019. Based on the findings, i.e., better production, increased revenue and greater self-determination, the study combines elements for a new business model for small-scale lending. It concludes that to be effective, a credit scheme needs to meet several conditions simultaneously: believe in the genuine will to repay, abolish the lender–borrower distance, ensure a role for women in decision making, add a savings mechanism, combine individual and collective investments and, finally, reserve funds for solidarity and climate issues.

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“…Además, el crédito puede desempeñar un papel importante en el desarrollo del sector rural. Según Jia, Luan, Huang, y Li (2015), con el acceso al crédito los agricultores podrían asumir mayores riesgos en proyectos más rentables en lugar de invertir en proyectos de menor riesgo, pero que podrían ser ineficientes. Por lo tanto, como lo mencionan Ibrahim, Kedir y Torres (2007) entender los factores que determinan el acceso de los hogares al crédito es importante para diseñar políticas encaminadas a reducir la pobreza, especialmente en países de bajos ingresos; sin embargo, estos esfuerzos se han visto obstaculizados por la poca disponibilidad de información a nivel de hogar.…”

Section: Introductionunclassified

“…Por un lado, la regulación sobre límites a tasas de interés hace que se cree un mercado alternativo (informal) en el que las tasas de interés no están controladas. Por otro lado, diferencias en los costos de detección, monitoreo y cumplimiento de los contratos lleva a la fragmentación de los mercados de crédito.18 Véase por ejemplo Zeller (1994) para el caso de Madagascar,Mohieldin y Wright (2000) para Egipto, yJia et al (2015) para las zonas rurales de China.…”

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Determinantes del acceso al crédito formal e informal : evidencia de los hogares de ingresos medios y bajos en Colombia

Iregui-Bohórquez¹,

Melo-Becerra²,

Ramírez-Giraldo³

et al. 2016

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Este documento proporciona evidencia empírica sobre los determinantes de la probabilidad de que un hogar tenga crédito, con el sector formal o informal, tanto en zonas urbanas como rurales, para lo cual se utiliza información de la Encuesta Longitudinal Colombiana de la Universidad de los Andes. También, se analizan los posibles factores que afectan la probabilidad de que los hogares se encuentren atrasados en el pago de sus créditos. Los resultados indican que la probabilidad de que un hogar tenga crédito está relacionada positivamente con el hecho de que el jefe del hogar esté casado, con el nivel educativo, el nivel de ingreso, el tamaño del hogar, la propiedad de la vivienda y la participación laboral. En particular, las estimaciones indican que el ingreso y la educación tienen una correlación positiva con la probabilidad de tener crédito formal y negativa con la probabilidad de tener crédito informal. Finalmente, los choques que tienen un efecto directo sobre el ingreso de las familias y eventos inesperados aumentan la probabilidad de estar en mora.Palabras clave: Deuda de los hogares, crédito formal, crédito informal, mora, Colombia Clasificación JEL: C25, G21, D12, R22 * Las autoras pertenecen a la Unidad de Investigaciones de la Gerencia Técnica del Banco de la República. Agradecemos a Paula Zamora y Alejandro Herrera por su labor como asistentes de investigación durante el desarrollo de este proyecto. Las opiniones expresadas aquí son responsabilidad de las autoras y no reflejan necesariamente las opiniones del Banco de la República ni de su Junta Directiva. AbstractThe objective of this paper is to provide empirical evidences on the determinants of household credit, formal or informal, in both urban and rural areas, using data from the Encuesta Longitudinal Colombiana de la Universidad de los Andes. Also, we analyze the possible factors that affect the likelihood that a household is in arrears. Results from Logit estimations indicate that the probability that a household has credit is positively related to the fact that the head of household is married, with the educational level, income level, household size, the home ownership and labor market participation. In particular, estimates indicate that income and education are positively correlated with the probability of having a formal credit and negatively related with the likelihood of having informal credit. Finally, shocks that have a direct impact on household income and unexpected events increase the probability of credit default.

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A Comparative Analysis of the Use of Microfinance and Formal and Informal Credit by Farmers in Less Developed Areas of Rural China

Cited by 16 publications

References 15 publications

Power of Agricultural Credit in Farmland Abandonment: Evidence from Rural China

Power of Agricultural Credit in Farmland Abandonment: Evidence from Rural China

The Alfredo Namitete Agroecology Credit System: A New Business Model That Supports Small-Scale Lending

Determinantes del acceso al crédito formal e informal : evidencia de los hogares de ingresos medios y bajos en Colombia

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