Academic literature on the topic 'Farmers' microcredit'

This study investigated the effect of microcredit on profit efficiency of small-scale poultry farmers in Oyo State. Multistage sampling procedure was used to select two hundred poultry farmers for the study. Data collected were analysed using descriptive statistics, Heckman selection model, stochastic frontier and Tobit models. Result from descriptive statistics showed that men (78%) are predominantly involved in poultry production. The average age of poultry farmers in the area of study is approximately 43 years. Most of the farmers are married (77.5%) and literate (80.5%). Furthermore, most of the respondents (73.5%) had access to microcredit with 87.5% belonging to one farmer’s association or the other. Heckman two-stage selection model revealed that membership of cooperative/farmer’s association and contact with extension agent are the significant factors influencing farmer’s access to microcredit. The second stage of the model reveals that age, years of education, household size, years of farming experience, distance to source of microcredit, timeliness of microcredit and stock size are the significant factors influencing the amount of microcredit obtained by farmers. Results obtained from the stochastic frontier model showed that smallholder poultry farmers had an average profit efficiency of 54.0% in poultry production. Furthermore, the Tobit model (Model 1) results revealed that amount of microcredit, distance to source of microcredit, interest rate and loan repayment period significantly influenced farmer’s profit efficiency while in the second model, years of formal education, poultry farming experience and membership of cooperative/farmer’s association influenced farmer’s profit efficiency. The results of two-side censored Tobit model suggest that microcredit variables are the most favourable variables for line of action. This suggested that policy makers should ensure that microcredit available through the agricultural credit programmes get to the needy farmers.

Purpose The purpose of this paper is to determine the impact of microcredit on smallholder poultry production and its subsequent role on domestic protein and food supply. Design/methodology/approach Cross-sectional farm-level data from 61 farmers with at least two years of microcredit access and 39 farmers without microcredit access in the Dormaa Municipality of Ghana collected in 2016 via semi-structured questionnaire were used. Using the propensity score matching, PSM, and data envelopment analyses approaches, the authors analysed the propensity of farmers’ taking microcredit and its effect on beneficiaries’ technical efficiency, productivity, profitability and domestic production of chicken and eggs, farm performance. The authors addressed selection biases with the PSM and answered the research question of whether farmers with microcredit access perform better than non-microcredit farmers. Findings Farmers with high years of education, farming experience, technology and machinery as well as micro-savings and female farmers are more likely to take microcredit whereas large farm size reduces farmers’ propensity to take microcredit. Furthermore, farms with microcredit access were more technically efficient, productive and profitable than they would have been in the absence of microcredit. Practical implications The paper can be useful to policymakers and microcredit institutions since it provides evidence of microeconomic impacts of microcredit on agricultural production and the determinants of farmers’ participation in microcredit. Originality/value The study helps to understand how access to credit can improve smallholders’ technology adoption, production efficiency and productivity and output thereby enhancing domestic food supply.

Our government always pushes hard forward the farmers’ microcredit of the rural credit cooperation. But actually, its risk is higher than other kinds of loan. Based on analyzing the risk of farmers’ microcredit, this paper builds risk assessment index system of farmers’ microcredit by using BP neural network. Through the paper, it can provide essential support and practical application for relative departments of farmers’ microcredit.

Purpose The purpose of this paper is to investigate factors affecting use of microcredit among farmers in Northern China. Design/methodology/approach A two-stage Heckman model is used to estimate the effect of farmer and family characteristics and loan and lending environment on likelihood of farmer participation in microcredit and the value of loans taken. Data from 342 first-hand observations in Northern China were used. Findings Social capital, production cost, non-labor family members, income, guarantee group membership, village head loan guarantee, and messenger use were found to increase use of microcredit. The same factors were found to affect the value of loans among participating farmers except a guarantor requirement for the loan replaces membership in a guarantee group. Practical implications Results support that there is demand for microcredit among farmers and that they are willing to take steps to obtain it including seeking membership in a household guarantee group. Identification of faced constraints facilitates understanding of supply-side efforts with potential to decrease financial exclusion with a focus on external-to-market intervention. Originality/value Pivotal findings are the importance of guarantee group membership for loan approval and that this requirement hinders farmers’ ability to obtain credit. Three alternatives are suggested to overcome this constraint including excluding low-risk borrowers from a group guarantee requirement; charging higher interest rates on high risk loans not supported by a guarantee; and development of insurance options to replace the guarantee.

Purpose The purpose of this paper is to analyze the impact of microcredit and agronomic technology on farm households’ prosperity, and to determine important factors affecting farmers’ access to microcredit and technology adoption in Indonesian intensive farming. Design/methodology/approach The focus of the study was farmers engaging with chili-based agribusiness in rural areas. Data for this study were compiled from a survey that interviewed 250 farm households. Samples of the study were randomly selected from chili farming community in three regions of Java during 2013–2014. Data were analyzed using structural equation modeling (SEM). Findings Microcredit provided positive direct and indirect impacts on household prosperity. Microcredit indirectly impacted the well-being through the mediation of technology adoption. Farmers’ characteristics and agribusiness environment determined farmers’ decision to access microcredit and adopt advanced technology. Microcredit and technology have enhanced farmers’ well-being through pathways that enabled farmers to develop farming scale. Practical implications The government should offer more alternatives to advanced technology and flexible procedures of access to credit at the same time to ensure sustained pathways of rural economic growth in Indonesia. Originality/value This paper applied a SEM to a proposition of simultaneous causal interrelations among microcredit, technology and farmers’ prosperity.

Purpose The purpose of this paper is to analyze determinants of farmers’ participation and credit rationing in microcredit programs using survey data from Ghana. Design/methodology/approach The authors use the Garrett Ranking Technique to analyze farmers’ reasons for participation or non-participation in credit programs, a probit regression model to estimate factors influencing farm households’ participation, and the Heckman’s sample selection model to identify factors influencing farm households’ probability of being credit rationed by microcredit programs. Findings The results reveal that farm households participate in credit programs because of improved access to savings services and agricultural loans. Fear of loan default and lack of savings are reasons for non-participation in credit programs. Furthermore, membership in farmer-based organizations (FBOs) and the household head’s formal education are positively associated with farmers’ participation in credit programs. The likelihood of farmers being credit rationed (i.e. their loan applications were either rejected or the amount of credit they applied for was reduced) is less likely among higher income farmers and members of FBOs such as farmer cooperatives and savings clubs. Practical implications The findings suggest that policy strategies aiming to improve access to savings and credit services should educate farmers and strengthen FBOs that could serve as entry points for financial service providers. Such market smart strategies have the potential to improve farmers’ access to financial services and reduce rural poverty. Originality/value Although existing studies have examined farmers’ participation in credit markets and credit rationing separately, the unique contribution of this paper is the analysis of participation in microcredit programs as well as the likelihood of farmers being credit rationed in Ghana.

The ultimate problem of organic paddy farm is limited access formal credit due to collateral requirement. Farmers only have access to semi-formal institution like cooperatives and group of farmers (Gapoktan.red) because of simplicity of administration procedure and payment system. The objectives of this study are to analized accessibility of micro-credit to organic paddy farmers in Bogor and its impact to production of organic paddy. With Heckman Sample Selection Model, we found that access of credit influenced negatively by age of farmers, number of household member, membership of farm group, and the acreage of land use. Microcredit give significant impact to production of organic paddy and it is simultaneous with fertilizer and labor. Microcredit that they have taken used to pay labor and also bought the fertilizer. Keywords : access of microcredit, impact of microcredit, production of organic paddy

The ultimate problem of organic paddy farm is limited access formal credit due to collateral requirement. Farmers only have access to semi-formal institution like cooperatives and group of farmers (Gapoktan.red) because of simplicity of administration procedure and payment system. The objectives of this study are to analized accessibility of micro-credit to organic paddy farmers in Bogor and its impact to production of organic paddy. With Heckman Sample Selection Model, we found that access of credit influenced negatively by age of farmers, number of household member, membership of farm group, and the acreage of land use. Microcredit give significant impact to production of organic paddy and it is simultaneous with fertilizer and labor. Microcredit that they have taken used to pay labor and also bought the fertilizer. Keywords : access of microcredit, impact of microcredit, production of organic paddy

Purpose – The purpose of this paper is to test whether there is higher return rate of investment for poor farmers than for un-poor farmers and to discuss its implication for poverty reduction microcredit rate policy. Design/methodology/approach – By using the household-level data of six provinces of China, farmer household production function is used in this paper to estimate the investment return rate of farmer. Findings – The paper indicates that regardless which kind of grouping standard is adopted, the investment return rates of poor farmer households in general are far lower than the non-poor. In general, the richer a farmer household, the higher is the return rate of his household productive operations. Practical implications – The study of this paper reminds policy makers that poverty reduction microcredit rate should really take endurance capacity of poor farmers for credit rate into accounting because of the low return rate of their family investment. Exorbitant credit rate should be avoided to protect the credit right of poor farmers. Originality/value – There is seldom study on the comparison of return rates of family operation investment between poor and un-poor farmers; there is also unenough empirical study on the rationality of high interest rate on poor households from the return rate of investment point of view. The authors expect this paper will have some contribution on these two points.

This study investigates the effects of microcredit on crop productivity in three villages located in district Charsadda, Pakistan. Khushali Bank, Pakistan, is an important institute that finances microcredit ranging from 15,000 to 50,000 PKR (Pakistani Rupees) per person. Sample size of 200 was choose for the analysis of this study, out of which 90 responded. Ninety farmers from three villages producing maize, tobacco, and sugarcane were interviewed. A paired sample t-test was applied to compare crop productivity in situations where microcredit was supplied with situations where it was not. Production per acre of all the three crops show a significant positive correlation with the amount of microcredit obtained from the bank. However, crop productivity remained significantly constant. Thus micro financing generally improves crop production; however, the constancy of crop productivity is explained by small credit volumes, by high interest rates, by lack of modern agricultural technology, by lack of productive ideas, and by bad monitoring through field officers of banks. The analysis of this study suggests some policy implications first, micro financing is a source of encouragement for the needy farmers, so local banks should advertise micro financing regularly. Second, the banks should increase its micro financing credit up to 200000 PKR, so that farmers can easily manage their expenses that will be more beneficial for local economy and individual profit. Third, Banks must decrease interest rate that will encourage needy farmers to take loans on regular basis. Keywords: Agricultural Technology, Microcredit, Productivity, Khushali Bank, KP, Pakistan.

Financing peasant farmers using sustainable and effective approach can reduce poverty level significantly among peasant farmers. Development Institutions and government deploy various financing models to fund peasant farmers as a means of intervention to alleviate poverty. This study assesses and compares two financing model i.e. matching grants and microcredit in order to know which model has greater impact in improving livelihoods of peasant farmers so that it can be advocated for as a model best suited to fund peasant farmers. The respondents for the study are peasant farmers who have accessed funding from Vision Fund Zambia a microcredit institution and Smallholders Agriculture Promotion Program an Institution that provides matching grants. The study is based on assessing livelihood improvement of peasant farmers using Care International framework that is focusing on capabilities, economic activities and assets. A total of one hundred and forty six respondents were selected using simple random procedure. The data was analysed using statistical package for social science (SPSS). Using descriptive statistics and focus group discussions, the finding shows marginal difference in livelihood improvement between microcredit and matching grants on assets and capabilities of the respondents. Matching grants exhibit higher impact on economic activities of the recipients as compared to microcredit. The study recommends that institutions offering matching grants must consider streamlining the process of project approval and disbursement while microcredit institution must tailor their services to client's needs and charge interest taking into consideration the vulnerability context. Overall matching grants are a better model for financing poor and vulnerable peasant farmers.

This thesis aims to address the practical and institutional problems in the development of farmers' microcredit to ultimately contribute to achieve sustainable development. The author, based on his long-term work experience in rural finance, analyzes the current situation of microcredit in rural areas and presents a set of mechanisms for risk management and scientific pricing of farmers’ in the framework of the construction of an iterative model with the support of statistical analysis. To be specific, based on improving farmers' scheduled repayment rate and a study of farmers' microcredit factors, criteria are formulated for selecting credible borrowers among farmers; Making full use of the decisive role of the market, an effective risk management model is gradually formulated that helps to foster a credit-based financial service environment in rural areas. Besides, software engineering is utilized to optimize and control farmers' microcredit risk management and scientific pricing of credit products. The study suggests that the farmers' microcredit risk control mechanisms established can effectively enable farmers' microcredit financial institutions to function as a main market player, while overcoming theoretical and practical difficulties in microcredit for farmers. Four suggestions are also presented. First, ensure that farmers enjoy the "right of approval" when applying for loans; second, transfer the "right of pricing" loan interests to farmers; third, transfer the "right of salary distribution" and risk control of loans to loan officers; and fourth, entrust the "management right" of loans to the system.
Esta tese tem como objetivo abordar os problemas práticos e institucionais no desenvolvimento do microcrédito dos agricultores para, finalmente, contribuir para alcançar o desenvolvimento sustentável. O autor, com base em sua experiência do trabalho de longo prazo em finanças rurais, analisa a situação atual do microcrédito em áreas rurais e apresenta um conjunto de mecanismos para a gestão do risco e a determinação científica de preços para o microcrédito dos agricultores no quadro da construção de um modelo interativo com o apoio da análise estatística. Mais especificamente, com base na melhoria da previsão da taxa de reembolso do microcrédito pelos agricultores e em um estudo dos fatores condicionantes desse reembolso, são formulados critérios para selecionar mutuários confiáveis entre os agricultores; Fazendo pleno uso do papel decisivo do mercado, é formulado gradualmente um modelo eficaz de gestão de risco que ajuda a promover nas áreas rurais um ambiente favorável de serviços financeiros baseados no crédito. Além disso, a engenharia de software é utilizada para otimizar e controlar a gestão de riscos de microcrédito dos agricultores e a determinação científica dos preços dos produtos de crédito. O estudo demonstra que o mecanismo de controle de risco de microcrédito dos agricultores assim estabelecido pode efetivamente permitir que as instituições financeiras de microcrédito funcionem como um participante principal do mercado, ultrapassando dificuldades que a teoria e a prática têm revelado no microcrédito para os agricultores. Quatro sugestões são ainda apresentadas. Em primeiro lugar, garantir que os agricultores desfrutem do "direito de aprovação" quando solicitam empréstimos. Em segundo lugar, transferir para os agricultores "direito de determinação do preço" da taxa de juro do empréstimo. Em terceiro lugar, passar o "direito de distribuição salarial" e o controle de risco dos empréstimos para os agentes de crédito. Em quarto lugar, confiar ao sistema o "direito de gestão" dos empréstimos.