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1 – 10 of over 2000Arbenita Kllokoqi, Ardi Parduzi and Jeton Mazllami
The purpose of this study is to examine the financial challenges faced by agricultural enterprises in the Republic of Kosovo. It aims to compare the various forms of financing…
Abstract
Purpose
The purpose of this study is to examine the financial challenges faced by agricultural enterprises in the Republic of Kosovo. It aims to compare the various forms of financing used in Kosovo with those in European Union (EU) countries. The study seeks to highlight opportunities and challenges with a focus on how they can learn from the experiences of EU countries.
Design/methodology/approach
The study is based on responses from agricultural enterprises in both the EU and Kosovo. Data was gathered through a survey conducted with 50 agricultural enterprises in Kosovo, whereas for EU context, information from the 2020 Survey on the Financial Needs and Access to Finance of EU Agricultural Enterprises (provided by EAFRD). Statistical data were processed using the Stata and SPSS programs.
Findings
In agriculture sector, loan is the primary form of financing to expand their activities and capacities, whereas financing for agricultural enterprises exhibits a negative relationship with the bureaucratic procedures associated with financing.
Research limitations/implications
The main research’s limitations include the unavailability of official data from the relevant institutions in Kosovo.
Practical implications
A possible implication arising from this research is the reliance of the development of agriculture enterprises on debt.
Social implications
Due to the lack of comprehensive data in this regard, is unable to analyze the specific impact of gender in financing patterns of these enterprises.
Originality/value
This study provides real data on the current situation of agricultural enterprises in Kosovo. Considering Kosovo’s goal to integrate with the EU, this comparative approach adds significant value to the study.
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Ummi Ibrahim Atah, Mustafa Omar Mohammed, Abideen Adewale Adeyemi and Engku Rabiah Adawiah
The purpose of this paper is to propose a model that will demonstrate how the integration of Salam (exclusive agricultural commodity trade) with Takaful (micro-Takaful – a…
Abstract
Purpose
The purpose of this paper is to propose a model that will demonstrate how the integration of Salam (exclusive agricultural commodity trade) with Takaful (micro-Takaful – a subdivision of Islamic insurance) and value chain can address major challenges facing the agricultural sector in Kano State, Nigeria.
Design/methodology/approach
The study conducted a thorough and critical analysis of relevant literature and existing models of financing agriculture in Nigeria to come up with the proposed model.
Findings
The findings indicate that measures undertaken to address the major challenges fail. In view of this, this study proposed Bay-Salam with Takaful and value chain model to solve a number of challenges such as poor access to financing, poor marketing and pricing, delay, collateral requirement and risk issues in order to avail farmers with easy access to finance and provide effective security to financial institutions.
Research limitations/implications
The paper is limited to using secondary data. Therefore, empirical investigation can be carried out to strengthen the validation of the model.
Practical implications
The study outcome seeks to improve the productivity of the farmers through enhancing their access to finance. This will increase their level of production and provide more employment opportunities. In addition, it will boost financial inclusion, income generation, poverty alleviation, standard of living, food security and overall economic growth and development.
Originality/value
The novelty of this study lies in the integration of classical Bay-Salam with Takaful and value chain and create a unique model structure which the researchers do not come across in any research that presented it in Nigeria.
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Kellen Murungi, Abdul Latif Alhassan and Bomikazi Zeka
The agricultural sector remains the backbone of several emerging economies, including Kenya, where it contributes 34% to its gross domestic product (GDP). However, access to…
Abstract
Purpose
The agricultural sector remains the backbone of several emerging economies, including Kenya, where it contributes 34% to its gross domestic product (GDP). However, access to financing for agricultural activities appears to be very low compared to developed economies. Following this, governments in a number of countries have sought to introduce banking sector regulations to facilitate increased funding to the agricultural sector. Taking motivation of the interest rate capping regulations by the Central Bank of Kenya (CBK) in 2016, this paper examined the effect of these interest rate ceiling regulations on agri-lending in Kenya.
Design/methodology/approach
The paper employs random effects technique to estimate a panel data of 26 commercial banks in Kenya from 2014 to 2018 using the ratio of loans to agricultural sector to gross loans and the natural logarithm of loans to agricultural sector as proxies for agri-lending. Bank size, equity, asset quality, liquidity, revenue concentration and bank concentration are employed as control variables.
Findings
The results of the panel regression estimations show that the introduction of the interest cap resulted in increases in the proportion and growth in agri-lending compared with the pre-interest cap period. In addition, large banks and highly capitalised banks were found to be associated with lower agri-lending, with differences in the effects across pre-cap and post-cap periods.
Practical implications
From a policy perspective, the findings highlight the effectiveness of interest rate capping in meeting this objective and supports the calls for strengthening cooperation between the government and key stakeholders in the financial sector. This will allow for the effective enforcement of policies by the regulatory powers in a manner that guarantees sound and dynamic financial systems, particularly within the agricultural sector.
Originality/value
As far as the authors are aware, this the first paper to examine the effect of the interest rate cap regulation on agri-lending in Kenya.
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Usman Farooq, Fu Gang, Zhenzhong Guan, Abdul Rauf, Abbas Ali Chandio and Faiza Ahsan
This study aims to investigate the long-run relationship between financial inclusion and agricultural growth in Pakistan for the period of 1960–2018.
Abstract
Purpose
This study aims to investigate the long-run relationship between financial inclusion and agricultural growth in Pakistan for the period of 1960–2018.
Design/methodology/approach
The autoregressive distributed lag (ARDL) approach, the Johansen co-integration test and the dynamic ordinary least squared (DOLS) method are used for the evaluation.
Findings
The results show that in both short- and long run, domestic credit has a significantly negative impact on the agricultural growth, while broad money and cropped area positively affected the agricultural growth in Pakistan in both cases.
Practical implications
The government and policymakers need to develop strategies that bring together agriculturalists on a single platform so that the government can clearly distinguish the interests of these farmers and can obtain precise information for allocating agricultural expenditure and easing access to credit for small-scale agriculturalists.
Originality/value
This is the first study to evaluate the impact of financial inclusion on the agricultural growth in Pakistan by using different econometric techniques, including the ARDL-bound approach, Johansen co-integration test and DOLS method.
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This study aims to determine the non-economic factors that probably influence the Pakistani farmers to use Islamic finance for agricultural production. This paper analyzes the…
Abstract
Purpose
This study aims to determine the non-economic factors that probably influence the Pakistani farmers to use Islamic finance for agricultural production. This paper analyzes the other religiosity and familial leadership constructs in the standard theory of planned behavior (TPB) model from the Islamic banking perspective.
Design/methodology/approach
Data were collected from 233 farmers using snowball sampling techniques and partial least square structural equation modeling used for data analysis. An additional qualitative analysis was conducted of seven respondents through semi-structured interviews to deepen into knowledge about Islamic banking.
Findings
The findings demonstrate that attitude, subjective norms, religiosity and familial leadership to use Islamic banking among the farmers play a primary motivating role in manipulating their behavioral intentions to use it. However, PBC negatively affected the behavior of farmers to use Islamic banking.
Practical implications
This study highlights the importance of emotional attachment between the farmers and Islamic financial products according to Shariah law. Therefore, Islamic banks need effective strategies for the development of innovative products in the agricultural sector according to the Shariah principle.
Originality/value
The research contributes to the area of Islamic banking, demonstrating that “familial leadership” significantly influences an individual’s behavior toward decision-making to use Islamic finance.
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Eka Nurhalimatus Sifa and Sudarso Kaderi Wiryono
This study aims to simulate and compare the effect of two financing schemes, Salam and conventional financing, on farmers’ cash flows.
Abstract
Purpose
This study aims to simulate and compare the effect of two financing schemes, Salam and conventional financing, on farmers’ cash flows.
Design/methodology/approach
The system dynamics simulation is used to conduct a multiple scenario-driven analysis to understand the behavior and the dynamic patterns concerning relationships among the variables in the model that are chosen and parameterized using both qualitative and quantitative data collected from West Java, Indonesia.
Findings
The authors affirm that farmers cannot rely solely on paddy fields and should seek other livelihoods to support their daily needs. The main finding is that the Salam scheme provides a higher income that can contribute to improving farmer welfare. The Islamic scheme also requires less adjustment than the standard scheme to meet the farmers’ needs.
Research limitations/implications
The probable effect of implementing the Salam method is not considered from the point of view of the financiers, as the scope of the study is limited to farmers. Furthermore, the implications of this study and recommendations for future research are presented.
Originality/value
To the best of the authors’ knowledge, this study adds to the extensive literature on Salam financing by being among the first to provide a quantifiable evaluation of the Islamic method compared to its conventional counterpart.
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Timothy Anakwa Osei, Samuel A. Donkoh, Isaac Gershon Kodwo Ansah, Joseph A. Awuni and Mensah Tawiah Cobbinah
Promoted for its inclusivity, agricultural value chain (AVC) financing leverages social capital and mechanisms such as off-take agreements and forward contracts to reduce…
Abstract
Purpose
Promoted for its inclusivity, agricultural value chain (AVC) financing leverages social capital and mechanisms such as off-take agreements and forward contracts to reduce borrowing and lending costs and risks for both farmers and lending institutions. AVC financing has been defined as the flow of financial products and services to and among the various actors within the AVC to address constraints of production and distribution and fulfill the needs of those involved in the chain by reducing risk and improving efficiency. This paper investigates how farmers' involvement in AVC affects their access to credit.
Design/methodology/approach
The authors collected primary data from 400 crop farmers in northern Ghana through a semi-structured questionnaire and analyzed the data, using the multinomial endogenous switching regression model.
Findings
Joint participation in AVC increased the amount of formal and informal credit received by 64 and 78%, respectively, compared to nonparticipation. Similarly, participation in AVC horizontal linkage and AVC vertical linkage increased the amount of formal and informal credit received by 40 and 47% and 46 and 74%, respectively, compared to nonparticipation. Irrigation farming, extension visits, knowledge of AVC in the community, access to a storage facility and trust in contract farming significantly influenced farmers' participation in AVC.
Originality/value
The authors’ work offers valuable insights into how different dimensions of value chain participation can impact smallholder farmers' access to credit. This work also underscores the importance of considering both formal and informal credit sources when analyzing the outcomes of value chain participation. The findings could enable formal financial providers to identify, liaise and/or resource informal financial players such as value chain actors to supply both formal and informal credit to farmers in AVCs.
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N'Banan Ouattara, Xueping Xiong, Abdelrahman Ali, Dessalegn Anshiso Sedebo, Trazié Bertrand Athanase Youan Bi and Zié Ballo
This study examines the impact of agricultural credit on rice farmers' technical efficiency (TE) in Côte d'Ivoire by considering the heterogeneity among credit sources.
Abstract
Purpose
This study examines the impact of agricultural credit on rice farmers' technical efficiency (TE) in Côte d'Ivoire by considering the heterogeneity among credit sources.
Design/methodology/approach
A multistage sampling technique was used to collect data from 588 randomly sampled rice farmers in seven rice areas of the country. The authors use the endogenous stochastic frontier production (ESFP) model to account for the endogeneity of access to agricultural credit.
Findings
On the one hand, agricultural credit has a significant and positive impact on rice farmers' TE. Rice farmers receiving agricultural credit have an average of 5% increase in their TE, confirming the positive impact of agricultural credit on TE. On the other hand, the study provides evidence that the impact of credit on rice production efficiency differs depending on the source of credit. Borrowing from agricultural cooperatives and paddy rice buyers/processors positively and significantly influences the TE, while borrowing from microfinance institutions (MFIs) negatively and significantly influences the TE. Moreover, borrowing from relatives/friends does not significantly influence TE.
Research limitations/implications
Future research can further explore the contribution of agricultural credit by including several agricultural productions and using panel data.
Originality/value
The study provides evidence that the impact of agricultural credit on agricultural production efficiency depends on the source of credit. This study contributes to the literature on the impact of agricultural credit and enlightens policymakers in the design of agricultural credit models in developing countries, particularly Côte d'Ivoire.
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Raymond K. Dziwornu, Eric B. Yiadom and Sampson B. Narteh-yoe
The cost of agricultural loans is a major constraint to the growth of the agriculture sector. This paper examines agricultural loan pricing by banks in Ghana using panel data…
Abstract
Purpose
The cost of agricultural loans is a major constraint to the growth of the agriculture sector. This paper examines agricultural loan pricing by banks in Ghana using panel data analysis.
Design/methodology/approach
Data were obtained from audited financial reports of 15 agricultural loan lending banks from 2010 to 2017. The study applies the random-effect model and the fixed-effect model in the analysis and uses the system generalized system method of moment to check the robustness of the results from the baseline models.
Findings
The study found that agricultural loan pricing by banks is significantly influenced by risk premium, cost of funds, loan impairment, agricultural growth rate and food inflation. Banks should leverage emerging technologies to de-risk agriculture loan pricing to allay the fear of default. Farmers should look for long-term and relatively cheaper funds to support agricultural loans. Increasing credit to the agricultural sector could increase output, thereby reducing food inflation uncertainty for competitive pricing of agricultural loans.
Originality/value
Agriculture employs about 52% of Ghana's labor force, contributing about 20% to GDP. But it is “under” financed. This study leads the way in unraveling the factors accounting for the high prices of agricultural loans in Ghana. This study further contributes to policy development toward increasing credit to the agricultural sector.
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