Sectoral credit choice in rural India

Pal, Debdatta; Laha, Arnab Kumar

doi:10.1016/j.jocm.2015.03.001

Cited by 21 publications

(22 citation statements)

References 24 publications

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“…Lending institutions also may have more confidence in educated households, as they are likely to have better employment opportunities in the nonfarm sector and thus have additional income to repay loans. Our results are consistent with the findings in the literature (Kumar, Singh, and Kumar 2007;Pal and Laha 2015;Kumar et al 2015). With regard to the relationship between social groups (STs and OBC) and access to formal credit, the results show that farmers belonging to STs and OBC are more likely to have access to formal credit than those belonging to SCs.…”

Section: Characteristics Of Institutional and Noninstitutional Borrowerssupporting

confidence: 94%

Institutional versus non-institutional credit to agricultural households in India: Evidence on impact from a national farmers’ survey

Kumar¹,

Mishra

Saroj³

et al. 2017

Economic Systems

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Section: Characteristics Of Institutional and Noninstitutional Borrowerssupporting

confidence: 94%

Institutional versus non-institutional credit to agricultural households in India: Evidence on impact from a national farmers’ survey

Kumar¹,

Mishra

Saroj³

et al. 2017

Economic Systems

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“…The result of this study is consistent with the findings in the literature (Kumar et al 2013;Pal & Laha 2015). It also in line with the assertions of , who reported a positive influence of educational level on households' ability to cope with the stringent procedures required for credit access.…”

Section: Determinants Of Rice Farmers' Credit Market Participationsupporting

confidence: 93%

Impact of Credit Demand on the Productivity of Rice Farmers in South West Nigeria

Ojo

Baiyegunhi

Salami

2019

JEBS

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Employing cross-sectional data from 360 rice farmers selected from three states in South West Nigeria, the study analyzes the impact of credit demand on the productivity of rice farmers. An Endogenous Switching Regression Model (ESRM) that accounts for both heterogeneity and sample selection biases were used to estimate the impact of credit demand on rice productivity in South West Nigeria. In addition, a Tobit regression model was employed to measure the level of participation of rice farmers in the credit market. The result of the first stage (probit model) of the ESRM revealed that household assets, access to service, climate variables, regional variables, and transaction cost are statistically significant in influencing farmersâ€™ credit demand decision. The results of the second stage of the ESRM indicate factors such as household assets and access to service were statistically significant in explaining variations in rice productivity among participants and non-participants in the credit market. Furthermore, the results of the Tobit model showed that the farmersâ€™ location income from rice farming experience, interest rate, and distance to the source of credit are statistically significant determinants of the amount of credit received. These findings suggest that facilitating farmersâ€™ access to credit will improve rice productivity. Therefore, it is imperative for government and development partner to work together in order to improve the conditions for suitable agricultural credit access to rice farmers, especially a review of interest rates. A necessary addition should be developed to the assistance already being provided under Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) in the form of loan guarantees and other risk-sharing incentives, such as a regulatory environment that supports the modern contractual obligations that are characteristic of well-functioning agricultural financing. This would not only contribute to the intensification of rice production in Nigeria to meet its increasing rice demand, but also improve rice farmersâ€™ productivity and their householdsâ€™ incomes.

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“…Fatima (2009) found that the chances of rural women in Pakistan obtaining credit increase with age, marriage and employment. In rural India, the probability of borrowing increases with agricultural land holding and the presence of irrigation on farmland (Pal and Laha 2015), the latter of which could be construed as a measure of technology adoption. In a field experimental study of farmers in Malawi, Giné and Yang (2009) found that bundling insurance (against production risk) with production credit significantly reduced the probability of borrowing since the mandatory insurance premium increases the overall interest rate on the loan.…”

Section: Related Researchmentioning

confidence: 99%

Are Technology Adoption and Collective Action Important in Accessing Credit? Evidence from Milk Producers in Tanzania

Twine¹,

Rao

Baltenweck

et al. 2018

Eur J Dev Res

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One of the targets of Sustainable Development Goal 2 is to double agricultural productivity and incomes of small-scale food producers through, among other things, improving access to financial services including credit. However, designing appropriate mechanisms for increasing access to credit by poor households remains a challenge, especially in Sub-Saharan Africa. This paper argues that technology adoption and collective action could provide pathways to enhancing access to credit. Evidence from milk-producing households in Tanzania suggests that group membership increases the probability of borrowing and the amount of funds borrowed by households, while adoption of artificial insemination increases the amount of funds borrowed. Two major conclusions are that public policy for increasing rural households' access to credit should promote collective action, and that the likely increase in amount of funds demanded by households due to technology adoption and collective action will require policy to address issues pertaining to credit rationing of rural households. Résumé L'un des Objectifs du Développement Durable, l'objectif 2, est de doubler la productivité agricole ainsi que les revenus des petits producteurs de denrées alimentaires, notamment en améliorant l'accès aux services financiers, y compris les crédits. Toutefois, la conception de mécanismes appropriés pour accroître l'accès au crédit par les ménages pauvres demeure un défi, en particulier en Afrique subsaharienne. Cet article fait valoir que l'adoption de technologies et l'action collective pourraient fournir des pistes pour améliorer l'accès au crédit. Les données issues des ménages producteurs de lait en Tanzanie suggèrent que l'adhésion au groupe augmente la probabilité d'emprunt ainsi que le montant des fonds empruntés par les ménages, tandis que l'adoption de l'insémination artificielle augmente le montant des fonds empruntés. Deux grandes conclusions sont que la politique publique visant à accroître l'accès des ménages ruraux aux crédits devrait favoriser l'action collective, et l'augmentation probable des fonds réclamés par les ménages en raison de l'adoption de technologies et de l'action collective exigera des politiques pour résoudre les problèmes liés au rationnement du crédit des ménages ruraux.

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Sectoral credit choice in rural India

Cited by 21 publications

References 24 publications

Institutional versus non-institutional credit to agricultural households in India: Evidence on impact from a national farmers’ survey

Institutional versus non-institutional credit to agricultural households in India: Evidence on impact from a national farmers’ survey

Impact of Credit Demand on the Productivity of Rice Farmers in South West Nigeria

Are Technology Adoption and Collective Action Important in Accessing Credit? Evidence from Milk Producers in Tanzania

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