The impact of climate change on agricultural productivity and agricultural loan recovery; evidence from a developing economy

Wahab, Fachrul; Khan, Majid Jamal; Khan, Muhammad Yar; Mushtaq, Rukhshanda

doi:10.1007/s10668-023-03652-9

Cited by 5 publications

(1 citation statement)

References 31 publications

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“…On the other hand, the authors Mohsin et al (2022) recommend that the relevant authorities encourage the development of new FinTech business models to stimulate banks and other financial institutions to increase the proportion of loans related to agriculture. Wahab et al (2023) analyze agricultural credit in connection with agricultural productivity and climate change that significantly influence agricultural productivity and the ability of farmers to pay loan installments and suggest that collaboration between governments and banks is needed to develop agricultural and credit policies in conjunction with investment in farmer education consistent with climate change adaptation strategies. Simultaneously, Xu et al (2023) state that critical factors, namely government policy encouragement, preferential support for agricultural loans, participation of specialized agricultural organizations, estimated income, and farmers' awareness of environmental protection, can contribute to the development and promotion of sustainable agriculture.…”

Section: Agricultural Loans-a Literature Reviewmentioning

confidence: 99%

Factors that influence bank loans for agriculture in Romania

Topor,

Ionescu,

Fülöp

et al. 2023

J. Infras. Policy. Dev.

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Agriculture is a determining factor regarding the development of the Romanian economy, noting its importance for population consumption and as a supplier of raw materials for the relaunch of other industries. Agricultural financing consists of credits granted to natural or legal persons for developing agricultural activities, expanding agricultural holdings, and commercializing agricultural production. The objective of this research is the statistical analysis of the determining factors in granting loans to Romanian farms. The study is based on the content analysis of the accounting reports of the 45 Romanian farms included in the research sample, based on which the profile of the farmer from the selected counties (Alba, Cluj, Mures, Sibiu, Dambovita and Prahova) is outlined. The obtained results highlight the fact that factors such as the requested amount (SUSO) are directly influenced by the worked area (TELU), by the turnover (CIAF), R = 0.6228, but also by the total value of the assets (TOTAL) R = 0.454. At the opposite pole, there is a weak correlation between SUSO and current liquidity (LICU), R = 0.2754, and the value of recorded expenses (CHEL), R = 0.3102. Implementing a credit policy that facilitates access to financing sources would support farms in modernization and development, increasing their competitiveness and general viability.

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Section: Agricultural Loans-a Literature Reviewmentioning

confidence: 99%

Factors that influence bank loans for agriculture in Romania

Topor,

Ionescu,

Fülöp

et al. 2023

J. Infras. Policy. Dev.

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Climate change, corporate risk-taking, and financialization: evidence from Chinese A-share non-financial listed companies

Zheng,

An,

Yang

2024

Environ Dev Sustain

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Climate change-induced risks, such as global warming, can affect the economic development of entities and, consequently, the stability of financial markets. Businesses are progressively making the transition to green in order to lessen the negative consequences of climate threats. This study examines the relationship between corporate risk-taking (CRISK) and financialization (FIN) in light of climate change. The impact of business risk-taking on financialization is experimentally investigated through the transmission chain of “CRISK - enterprise value – FIN” using a fixed-effects model. The study also analyzes the moderating effect of climate change on the direct and indirect channels of climate change by using “temperature” and “investors’ concern about climate,” respectively. In addition, the empirical results are tested for robustness using propensity score matching and an instrumental variable method. This study’s findings reveal the following key insights. First, CRISK significantly enhances FIN by improving firm value. Second, enterprises with high financing constraints and manufacturing enterprises are more likely to have a positive correlation between CRISK and FIN. Third, the relationship between CRISK and FIN is enhanced by the direct transmission channel of increasing climate risk, but the indirect transmission channel is not significant. This study proposes policy recommendations to address the effect of climate risk on CRISK and FIN. Among these suggestions are the prudent distribution of financial resources among enterprises according to their level of risk-taking and the reinforcement of regulatory authorities’ financial oversight of businesses with high financing constraints and the manufacturing sector. By implementing these policies, companies can better manage climate-related risks and contribute to financial stability.

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A Review on Climate Change, Credit Risk and Agriculture

Céu,

Gaspar

2024

Rural Sustainability Research

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Climate change poses a significant threat to agricultural productivity, necessitating a comprehensive understanding of its implications for both agricultural firms and capital lenders. This systematic literature review aims to elucidate emerging trends in addressing climate-related risks in agriculture and credit sectors. Drawing from a rigorous analysis of 39 articles sourced from Scopus and Web of Science databases, three key thematic dimensions have emerged: (i) agricultural lending and credit risk, (ii) green principles and sustainability, and (iii) the context of developing countries. From the impact of climate change on the recoverability of loans to the imperative of transitioning towards a greener and more sustainable economy, alongside the nuanced challenges faced by agriculture in developing countries, we analyzed prominent and recent literary approaches. The findings underscore the need to integrate climate change considerations into agricultural and credit policies. Policymakers and financial institutions should prioritize climate education for farmers and promote sustainable financial approaches. Anticipated climate risks will impact lenders’ capital reserves, necessitating portfolio adjustments. A deep understanding of climate change’s interplay with agriculture lending and credit risk is vital, urging proactive policy and practice. Addressing climate challenges in agriculture demands a multifaceted strategy encompassing tailored credit policies, improved access to credit, financial empowerment, and the mitigation of social inequalities. This review highlights the urgent need for proactive strategies to mitigate climate risks and ensure a resilient agricultural sector, emphasizing the crucial role of research and policy interventions in navigating the complex landscape of climate change impacts on agriculture.

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The impact of climate change on agricultural productivity and agricultural loan recovery; evidence from a developing economy

Cited by 5 publications

References 31 publications

Factors that influence bank loans for agriculture in Romania

Factors that influence bank loans for agriculture in Romania

Climate change, corporate risk-taking, and financialization: evidence from Chinese A-share non-financial listed companies

A Review on Climate Change, Credit Risk and Agriculture

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