Agricultural credit provision: what really determines farmers’ participation and credit rationing?

Asante-Addo, Collins; Mockshell, Jonathan; Zeller, Manfred; Siddig, Khalid; Egyir, Irene S.

doi:10.1108/afr-02-2016-0010

Cited by 82 publications

(70 citation statements)

References 35 publications

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“…The abilities of the farmer to pay back the borrowed money is the most crucial factor determining access to farm credit. The credit worthiness of farmers depends on their worth measured as value of assets legally owned by the farmer, payment history, savings history, social capital and other socioeconomic factors ( Chandio et al., 2020 ; Asante-Addo et al, 2017 ; Abdul-Jalil, 2015 ). Income is normally used as proxy for worth in econometric models.…”

Section: Resultsmentioning

confidence: 99%

Farm household access to agricultural services in northern Ghana

Anang

Asante

2020

Heliyon

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Access to agricultural services promotes agricultural production and livelihoods of smallholders in most developing countries. This study explores the factors affecting smallholders' access to agricultural services in northern Ghana. The study relied on survey data for the analysis. We estimated a multivariate probit model to assess the factors influencing access to agricultural services and a generalized Poisson regression model to evaluate the factors affecting the degree of access to these services. The results indicated that farmers had varying degree of access to different agricultural services. The most accessed service was agricultural extension (63% access) while the least was farm credit (40% access). Access to services and the degree of access (number of services accessed) were both influenced by household size, farming experience, household income, farmer group membership, and geographical location. In addition, the number of services accessed by farmers was influenced by participation in off-farm work. The paper proposed measures to enhance smallholders' access to agricultural services to promote agricultural production, food security and rural livelihoods.

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Section: Resultsmentioning

confidence: 99%

Farm household access to agricultural services in northern Ghana

Anang

Asante

2020

Heliyon

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“…Next, we evaluate if the social capital variables affect farm household's ability to get a loan (formal and informal). Following [10] Asante-Addo et al [52], and Wossen et al [53], we estimate two Probit model specifications:…”

Section: Methodsmentioning

confidence: 99%

The Influence of Social Capital on Farm Household’s Borrowing Behavior in Rural China

et al. 2018

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This paper evaluates whether social capital affects the ability of farm households to obtain formal and informal loans. We test for the impact of two measures of social capital. The first measure, kinship, captures the traditional aspects of bonding social capital in rural areas that might affect the probability of getting informal loans. As the economic reforms in China have changed the traditional rural way of life and weakened the role of kinship, more mobile farmers are likely to develop a different kind of social capital also based in the Chinese tradition but not focused exclusively on kin. This friendship social capital is hypothesized to affect farmers’ ability to get both formal and informal loans. We use the Chinese Household Finance Survey data from 2013 and estimate the probability of obtaining credit, while also accounting for the reverse causality. In addition, we use the Heckman selection model to establish how social capital affects not only the probability of getting loans but also the size of the loan. Empirical results suggest that social capital affects borrowing by farm households. In particular, the friendship social capital has a positive effect on farm household’s ability to get formal loans, and has a substitution effect on informal borrowing, while kinship has a positive effect on farm households’ ability to get informal loans. Friendship and kinship are positively associated with the amount of a farm household’s formal and informal loans, respectively.

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“…The banking sector is now reasonably competitive, capitalized, sound and solid (BANK OF GHANA, 2007). Despite these developments in the banking sector, the agriculture sector's share of credit received compared to other sectors from the formal FIs is low (ASANTE- ADDO, MOCKSHELL, et al, 2017, ASIEDU-MANTE, 2005. Also, according to ATIENO (2001), formal lenders policies make potential borrowers, particularly poor stakeholders such as fishermen and farmers constrained in their credit demand which in turn affects their production, income, and standard of living.…”

Section: Introductionmentioning

confidence: 99%

Determinants of credit constraint of artisanal fishermen in Ghana

et al. 2020

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Due to the high risk associated with fishing, access to credit becomes very difficult for fishermen. The study was conducted to investigate the determinants of credit constraint on artisanal fishermen with survey data collected from artisanal fishermen in the Western and Central Regions of Ghana. A multi-stage sampling procedure was used to select respondents for the study. Data collected were analyzed with the aid of descriptive and IV-Probit model. Most of the fishermen were in their youthful stage. From the study, while boat ownership and off-fishing activity reduce the probability being credit constrained, complex procedure, and disbursement time lag increase fishermen probability of being credit constrained. The findings of the study also indicated that there is a significant difference between constrained and unconstrained fishermen fishing activity and financial status. Therefore, fishermen in need of additional credit should be catered for to increase their production, hence, livelihood.

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Agricultural credit provision: what really determines farmers’ participation and credit rationing?

Cited by 82 publications

References 35 publications

Farm household access to agricultural services in northern Ghana

Farm household access to agricultural services in northern Ghana

The Influence of Social Capital on Farm Household’s Borrowing Behavior in Rural China

Determinants of credit constraint of artisanal fishermen in Ghana

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