Factors Affecting Farmers’ Access to Formal and Informal Credit: Evidence from Rural Afghanistan
| Autor: | Masaood Moahid, Keshav Lall Maharjan |
|---|---|
| Rok vydání: | 2020 |
| Předmět: |
Geography
Planning and Development TJ807-830 credit constraints 010501 environmental sciences Management Monitoring Policy and Law TD194-195 01 natural sciences Renewable energy sources formal credit Hardware_GENERAL Probit model 0502 economics and business participation GE1-350 double hurdle model 0105 earth and related environmental sciences Sustainable development Environmental effects of industries and plants Public economics Renewable Energy Sustainability and the Environment business.industry 05 social sciences Religious belief amount of credit Environmental sciences informal credit Shock (economics) Crop diversity Agriculture probit model Business Rural area 050203 business & management |
| Zdroj: | Sustainability Volume 12 Issue 3 Sustainability, Vol 12, Iss 3, p 1268 (2020) |
| ISSN: | 2071-1050 |
| Popis: | Adequate access to credit is necessary for the sustainable development of agriculture. This study uses a double hurdle model to investigate what affects farming households&rsquo credit participation and amount, and a Probit model to find out credit constraints. For this purpose, the data from a survey of 296 farming households in Afghanistan was utilized. The study finds that households obtain credit for their agricultural activities from various formal and informal sources. The results of the double hurdle model reveal that the financial activities of the households were positively determined by crop diversity, education, number of adults in a household, size of land, and access to extension. Non-agricultural income decreases the likelihood of participation. The results of the analysis of credit constraints indicate that formal credit did not help small-scale and remoter farming households however, these households relied on informal credit, especially when they faced income shock. Furthermore, religious belief increased the chances of avoiding formal credit but not informal credit. It is suggested that formal credit should be expanded to rural areas, especially to small-scale farming households. Policy makers should also consider increasing access to extension. Formal financial institutions should provide Sharia-compliant credit, which increases the confidence level of households in using formal credit in Afghanistan. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|