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1 – 10 of over 1000Ummi 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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This paper examines the relevance of Public-Private-Community Partnerships (PPCPs) as an alternative mechanism in enhancing food security during the COVID-19 pandemic and beyond…
Abstract
Purpose
This paper examines the relevance of Public-Private-Community Partnerships (PPCPs) as an alternative mechanism in enhancing food security during the COVID-19 pandemic and beyond in Zimbabwe. It also draws attention to the complexities of adopting PPCPs, and proposes possible options to improve their effectiveness.
Design/methodology/approach
The study applied concurrent mixed research methods. The sample population comprised multiple stakeholders in the area of food security and agricultural financing in Zimbabwe. The research adopted purposive and snowball sampling techniques. Data were collected through questionnaire, in-depth interviews, focus group discussions (FGDs) and documentary analysis. Descriptive statistics were used to analyse quantitative data, while qualitative data analysis was conducted thematically.
Findings
Prior to the outbreak of the COVID-19 pandemic, food insecurity was a consistent challenge in Zimbabwe. The pandemic has worsened the situation by further disruption of food systems and limiting people's access to food. PPCPs could be feasible alternative as they enhance value chain collaboration, improve access to inputs, reduce information asymmetry, ensure trust and facilitate risk sharing. PPCPs require proper design, control of transaction costs, clear definition of partners' roles, fair risk sharing, trust, and flexibility.
Originality/value
PPCPs are yet to be adopted in the Zimbabwean agricultural sector. The research informs policymakers on the need to implement multi-stakeholder collaborations in food production.
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Ishrat Hossain, Aliyu Dahiru Muhammad, Binta Tijjani Jibril and Simeon Kaitibie
In societies with strong presence of Islam, Islamic instruments with more scope for fairness and equity can be innovatively harnessed to play an increasing role in the development…
Abstract
Purpose
In societies with strong presence of Islam, Islamic instruments with more scope for fairness and equity can be innovatively harnessed to play an increasing role in the development process and poverty alleviation schemes. Poor smallholder farmers dominate agricultural production in many developing countries and contribute a significant portion of global food production. This paper aims to develop a scheme to improve poor smallholder farmers’ vulnerable financial situation through the application of Zakah and Salam contract, using Bangladesh as a case study. Secondary goals are to show the effect of the scheme on food security and relevance to Nigeria.
Design/methodology/approach
The authors explore the existing traditional modes of financing available to poor smallholders, identify their challenges and propose an appropriate Islamic financing scheme.
Findings
With the Zakah-based Salam forward contract, the proposed scheme would procure food through Institutional Demand to offer interest free financing, fair price and access to new marketing channels and reduce income uncertainty for the rural smallholders. The discussions indicate that the local food security will be enhanced through incentivized farming activities and disbursement of food from the food bank to the Zakah-eligible food insecure local people.
Research limitations/implications
This proposal brings forth a potentially powerful idea that needs further empirical validation.
Originality/value
The religion-based Institutional Demand initiative to promote smallholder agricultural development and social protection is a novel one. The attempt to apply the framework to Nigeria context shows the potential of the framework to generalize for other Muslim developing countries with similar characteristics, especially the poorer agriculture-based countries.
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Chi Aloysius Ngong, Chinyere Onyejiaku, Dobdinga Cletus Fonchamnyo and Josaphat Uchechukwu Joe Onwumere
This paper investigates the impact of bank credit on agricultural productivity in the Central African Economic and Monetary Community (CEMAC) from 1990 to 2019. Studies’ results…
Abstract
Purpose
This paper investigates the impact of bank credit on agricultural productivity in the Central African Economic and Monetary Community (CEMAC) from 1990 to 2019. Studies’ results on the impact of bank credit on agricultural productivity are not conclusive. The studies demonstrate diverse outcomes which are debatable. The results are conflicting.
Design/methodology/approach
Agricultural value added (AGRVA) to the gross domestic product (GDP) proxies agricultural productivity while domestic credit to the private sector by banks (DCPSB), broad money supply, land, inflation (INF), physical capital (PHKAP) and labour supply are explanatory variables. The autoregressive distributed lag technique is utilized.
Findings
The co-integration test results show a long-run co-integration among the variables. The findings disclose that DCPSB, land and PHKAP impact positively on the AGRVA. Broad money supply, INF and labour impact negatively on the AGRVA to the GDP.
Research limitations/implications
The results suggest that the CEMAC governments should encourage effective ways to increase bank credit flow to private enterprises in the agricultural sector through efficient bank's intermediation.
Practical implications
The governments should create more agricultural banks and improve the operation of existing ones to ensure direct credit to agricultural activities. The Bank of Central African Economic and Monetary Community should apply aggressive policy which eliminates all the bottlenecks undermining credit flow to the private sector in mutualism with agricultural productivity.
Social implications
The commercial banks should give more credit to private sector to mutually benefit the agricultural sector and the banking sector. The governments of the CEMAC economies should expand funding into the capital market which considerably boosts agricultural productivity.
Originality/value
Studies’ results on the impact of bank credit on agricultural productivity are not conclusive. The studies demonstrate diverse outcomes which are debatable. The results are conflicting; some reveal positive impacts, some show negative impacts and others indicate U-shape behaviour. Hence, research is required to fill the lacuna.
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Charles Martinez, Christopher N. Boyer, Tun-Hsiang Yu, S. Aaron Smith and Adam Rabinowitz
The authors examined the impact of the Market Facilitation Program (MFP) and Coronavirus Food Assistance Program (CFAP) payments to United States agricultural producers on…
Abstract
Purpose
The authors examined the impact of the Market Facilitation Program (MFP) and Coronavirus Food Assistance Program (CFAP) payments to United States agricultural producers on non-real estate agricultural loans.
Design/methodology/approach
The authors used quarterly, state-level commercial bank data from 2016–2020 to estimate dynamic panel models.
Findings
The authors found MFP and CFAP payments not associated with the percentage of non-real estate agricultural loans with payments over 90 days late. However, these payments associated with the percentage of non-real estate agricultural loans with payments between 30 and 89 days late. The available data utilized cannot consider when producers received the actual payment and what they specifically did with those funds.
Originality/value
The contribution of this study is for US policymakers and agricultural lenders. The findings could be helpful in designing and implementing future ad hoc payment programs and provide an understanding of potential shortcomings of the current safety net for agricultural producers in the Farm Bill. Additionally, findings can assist agricultural lenders in predicting the impact of ad hoc payments on their distressed loan portfolios.
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Abbas Ali Chandio, Yuansheng Jiang, Abdul Rehman, Martinson Ankrah Twumasi, Amber Gul Pathan and Muhammad Mohsin
In 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…
Abstract
Purpose
In 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/approach
A 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.
Findings
The 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/value
This study is the first, to the best of authors' knowledge, to demonstrate the influence of various socioeconomic characteristics of smallholder farmers on demand for formal credit in Sindh, Pakistan. It also illustrates the imperative contribution to the literature regarding credit access and demand to improve the agricultural productivity.
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Hassan Azganin, Salina Kassim and Auwal Adam Sa'ad
Small farmers are considered one of the most affected communities worldwide due to poverty. Hence, this paper aims to study how the proposed waqf crowdfunding models are intended…
Abstract
Purpose
Small farmers are considered one of the most affected communities worldwide due to poverty. Hence, this paper aims to study how the proposed waqf crowdfunding models are intended to provide alternative sources of funds for the waqf institutions and farmers.
Design/methodology/approach
The present study employed a qualitative method by analysing the relevant literature on crowdfunding, waqf cash, waqf and agriculture, together with the primary sources of the Ḥadīth.
Findings
This paper provides the conceptual framework of two waqf crowdfunding model (WCM) and the required parameters for their application. It is found that crowdfunding can bring immense benefits to the agriculture sector and farmers if it is integrated with waqf. This system will enable underprivileged farmers to meet their necessities and participate in their country's economic development.
Research limitations/implications
Future research may consider a waqf crowdfunding integrated model targeting other businesses.
Originality/value
This study provides the required parameters for the application of the proposed models. Four areas were analysed and discussed: the regulatory compliance parameters, the shariah compliance parameters, the risk management parameters and, finally, waqf governance parameters. To the best of the author's knowledge, this is the first proposed waqf and crowdfunding integrated model for agricultural financing.
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