Impact of Socio-Economic Characteristics of Farmers on Access to Agricultural Credit

The government of Pakistan introduced several agricultural credit programmes through institutional sources. The impact of these programmes was less than optimal due to rambling credit policies. The farmers were facing many constraints to avail agricultural credit in a timely fashion. The collateral inter alia was one of the major constraints. The objective of the paper is to identify constraints and suggest remedial measures to make efficient use of agricultural credit schemes. Majority of the farmers revealed that they could not avail credit because of needed collateral. The hard hits were tenants and share croppers who do not own land, and thus were unavailable to avail credit. The high mark up both from formal and informal sources was another constraint. The borrowing behavior of the respondents was estimated through the logit model and identified the determinants of credit constraints. The results showed that the coefficients of transitory income, education level, and predicted interest rate have important bearing on borrowing behavior. The household consumption expenditure was positively and significantly determined by operational holding and value of implements

Agriculture is not only the backbone of our food, livelihood and ecological security system, but is also the very soul of our sovereignty. In Pakistan population density is high and has been increasing day by day and agricultural land has been decreasing because of fragmenting or converting it into residential plots. To meet the domestic food requirements and raising standard of life use of improved production technologies developed by research is must. In this behalf government of Pakistan has been extending loan to poor farmers for adoption of new farm technology; a capital intensive technology. Right adoption of new farm technology depends on different demographic factors of farmers. Therefore objective of the paper was to see who benefits more of credit. Primary data regarding different determinants effecting well being of farmers after use of credit was collected from 320 farmers who participated in credit using stratified sampling technique through structured questionnaire. Descriptive statistics, ANOVA and Linear regression model was applied with the help of SPSS. Education and visiting agriculture information centre were found significant suggesting younger more educated farmers who visits information centre be provided credit ,as they had ability to improve their standard.

Journal of Asian Business and Economic Studies

PurposeIn the developing countries, formal credit has dominant role for the development of agriculture sector. It increases the farmer's purchasing power for better farm inputs and agricultural technology for high crop productivity. The main purpose of this study is to examine the influence of socioeconomic characteristics of smallholder farmers for credit demand in Sindh, Pakistan.Design/methodology/approachA cross-sectional data set randomly collected from 90 smallholder farmers in Thatta district, Sindh, Pakistan, is examined. Descriptive statistics, correlation and the OLS regression method were used to demonstrate the important factors affecting the demand for formal credit.FindingsThe results revealed that formal education, experience of farming, landholding size, road access and extension contacts positively and significantly influenced the demand for formal credit.Originality/valueThis study is the first, to the best of authors' knowledge, to demonstrate the influenc...

2015

Access to credit generally refers to the possibility of individuals or an enterprise to access financial services from the formal sources or carrying capacity of loans from financial institutions. Accessibility is determined by the demand of clients with existing supply of credit from different banks. This study tries to find those factors which are responsible to access agricultural credit from banks by the small and marginal farmers. The age, gender, level of education, family size, landholdings, irrigation facilities, income level, marital status and occupation are considered as determinants of access to agricultural credit. Out of these variables landholdings, educational status, irrigation facilities, income level and gender are found to be the significant factors in determining the agricultural credit access of the small and marginal farmers from the banks. It was concluded that policies needs to be redirected on government-sponsored and guaranteed agricultural financing schem...

Asian journal of advances in agricultural research, 2024

The study aimed at investigating constraints in access to institutional agricultural credit and pattern of utilization of the credit obtained by the farmers in the state of Odisha. With the application of multi stage random sampling technique, 175 farmers are selected for the analysis of the study. Descriptive statistics, Credit Adequacy Ratio have been employed in the study to identify the constraints in accessibility of credit for different groups of farmers. An index used by Lalhunthara & NVR is employed in the study to find out major difficulties faced by the farmers. Descriptive statistics, correlation and regression technique have been incorporated in the study to examine the credit utilization pattern and its relationship with other farm related socio-economic variables. The study found that credit gap is high for landless and marginal farmers while smaller for large

The study was conducted in Rajshahi, Jamalpur and Rangpur district to identify the constraints to access credit and its impact on farm household. A total 180 farmers of which 30 credit users and 30 credit nonusers from eachdistrictswere selected. The study revealed that highly responded constraints for bank credit were cumbersome procedure (83%), late disbursement of credit (62%), requirement of adequate collateral (61%). High interest rate, short term and small amount of credit were highly responded constraints for credit from NGOs and local moneylenders. The impact of facing these constrains of access to credit createdlot of troubles to get credit such as hamper in agricultural activities (59%), increase cost of credit, and sell agricultural crops at low price to manage the money of every installment. Level of education, having off farm income, membership of any institution andfarmers' knowledge level about credit were significant determinants to increase probability of access to credit. Access to credit may increase if the NGOs reduce their interest rate of credit. Access to credit from formal institution may increase through improving credit disburse system for hassle free quick, and timely sanction of credit.

Journal of Rural Development, 2022

The study has attempted to examine the determinants of formal agricultural credit in rural Uttar Pradesh using National Sample Survey Organisation data from the 70th round (2012-13). The Binary Logistic Regression (BLR) model is used to examine the determinants of formal credit in Uttar Pradesh. Socioeconomic and demographic characteristics such as age, gender, social group, and family size are grouped into social, economic, and extension services. The findings from this study revealed that indebtedness exists and that almost 45 per cent of farmers have taken credit from informal credit agencies. Further, there is significant heterogeneity in terms of socioeconomic and demographic features among farmers who have taken credit from formal and informal credit agencies. The BLR results show that gender, literacy rate, operated area, bank account, livestock, and Kisan Credit Card are key social and economic determinants of formal credit in rural Uttar Pradesh. The calculated odds ratio shows a 2.008 times higher probability of literate male farmers taking a loan from formal credit than others. Likewise, there is a 3.10 times higher probability of taking formal credit if farmers follow technical advice provided by agricultural universities, NGOs, and scientists through open-source platforms. Hence, the following policies are suggested to deal with indebtedness: (i) Policymakers can choose to intervene in the rural credit lending system by liberalising policy to more accurately reflect the characteristics of potential borrowers and in light of their current borrowing strategies, (ii) the BLR results depict a positive relationship with land size, and agricultural households with larger land seem to get more benefits. Therefore, the government should focus on marginal and small farmers, who have larger shares in the total operational landholdings, (iii) safety net programmes like the Public Distribution System (ration cards), in the presence of formal credit, may induce farmers and their families to increase their per capita monthly consumption expenditures, and (vi) State intervention is also required in terms of increasing the size of livestock, as this can be an area where Uttar Pradesh can lead the other States as this will help in diversification in the field of agriculture .

2008

The study analyzed the constraints faced by the farmers to rural credit by utilizing two household level data sets. The first survey Pakistan Rural Household Survey (PRHS) 2001 was utilized to study the purpose, source structure and utilization of rural credit and; ...

Zimbabwe Agricultural Journal, 2018

One of the most crucial and leading factors constraining smallholder farmers' development in developing countries like Zimbabwe is limited access to financial capital and credit especially from the formal lending institutions. This is because on one hand, these farmers fail to fulfil the formal institutions' lending requirements and on the other, the banking sector considers these farmers as highly risky. This study is conducted with the aim of identifying the major factors affecting access to formal credit by smallholder farmers with particular reference to Chivi district. The data for the study was collected from farmers in the district. It was collected from randomly selected six wards in the district through questionnaires. The estimation result employing the logit model reveals that staying closer to formal financial institutions, education, age, the square of age and sex are important factors which determine access to formal credit in the district. However, income was a statistically insignificant variable. The result leads to the suggestion that, policies designed to empower women so as to enable them to access formal credit should be implemented. There is also need to improve educational standards and increase the number of financial institutions in Chivi.

This study investigated the factors affecting credit accessibility in Owerri agricultural zone of Imo state. Multi-stage sampling technique was used for sample selection. Data were collected with the use of structured and validated questionnaire from 7 purposively selected institutionalized credit sources and 60 randomly selected credit beneficiaries, comprising 20 farmers from each of the 3 purposively selected LGAs in the study area. Data were analyzed with descriptive statistics and Multinomial Logistic Regression (MLR). The result showed that (78%) of the farmers were in their active working age (40years) and majority (92%) of them were married; with a mean family size of 8 persons. This study has identified interest rate, lack of collateral and guarantor as major factors that negatively affected credit accessibility in the study area. The study recommended that the farmers should take advantage of the various credit facilitates offered by institutionalized sources in order to expand their production. The institutionalized credit sources should also put in place a comprehensive credit risk management process to identify, measure, monitor/control credit risk and where appropriate, hold capital against these risks in order to reduce risk of delinquencies and defaults.