How Credit Affects the Poor Household’s Expenditure?: A Case Study of Vietnam

Giang, Tran Thi; Wang, Guohua; Chien, Nguyen Dinh

doi:10.12735/jfe.v3i1p31

Cited by 3 publications

(1 citation statement)

References 25 publications

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“…The ATT for NNM was Gh¢ 3,503.333 (US$ 606.11) while KM and SM were Gh¢ 4296.939 (US$ 743.42) and Gh¢ 5502.660 (US$ 952.02), respectively. The finding follows Giang et al (2015) who reported that credit increase expenditure. It must be noted that, since trade credit is seen as an alternative credit source, credit could be the same as trade credit in the extreme case.…”

Section: Resultssupporting

confidence: 71%

Trade credit from agrochemical vendors as an alternative source of finance for cabbage producers in the Bono East Region of Ghana

Amrago

Mensah

2022

AFR

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PurposeThe purpose of this study is to examine trade credit from agrochemical vendors as an alternative source of finance for cabbage producers in the Bono East Region of Ghana. The determinants of trade credit supply and impact on cabbage producer’s profitability are investigated.Design/methodology/approachThe study sample size is 260. The perception index, probit regression, negative binomial regression and the propensity score matching (PSM) was employed to assess the perception of trade credit, factors influencing trade credit supply and the impact of trade credit supply on the cabbage producer’s profitability and agrochemical vendor’s welfare respectively.FindingsThe perception index analysis revealed that the agrochemical vendors, in general, had a positive perception of trade credit. Different groups of factors influence trade credit supply. Further along, the number of times trade credit was used by the cabbage producers was influenced by several factors. On the PSM result, trade credit use had a significant positive impact on the cabbage producer’s profitability. In detail, all the matching estimations revealed that profitability increased above Gh¢ 4,000.00 (US$ 692.04). Likewise, the robustness check result (Inverse Probability Weighted Regression Adjustment (IPWRA)), was no different from the matching estimations. Generally, the result indicates that the impact of trade credit supply on the agrochemical vendor's welfare using total household expenditure, total savings and income as proxy variables for welfare were positive.Originality/valueTrade credit has encountered less attention in the agricultural finance discourse; however, this study makes an imperative contribution on the same. Specifically, the study reveals the determinants of trade credit supply from agrochemical vendors and a positive impact of trade credit use on the cabbage producer’s profitability, a result which has not been investigated in the trade credit literature.

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Section: Resultssupporting

confidence: 71%