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11 – 20 of over 1000
Article
Publication date: 6 May 2021

Josephine Cherotich, Kenneth Waluse Sibiko and Oscar Ingasia Ayuya

Inadequate finance is considered a major factor limiting the growth of small-scale women-owned farm enterprises in Sub-Saharan Africa. Women empowerment programs such as table…

Abstract

Purpose

Inadequate finance is considered a major factor limiting the growth of small-scale women-owned farm enterprises in Sub-Saharan Africa. Women empowerment programs such as table banking (TB) and women enterprise fund were initiated in an attempt to curb the credit gap affecting women in agribusiness. This paper determines the factors influencing the extent of credit access among women farm-entrepreneurs who are either members or nonmembers of TB groups in Kenya.

Design/methodology/approach

The study was conducted in Kericho County using a sample of 384 respondents. Factor analysis was used to generate three indicators of entrepreneurial orientation which were included as explanatory variables in the regressions. Double hurdle econometric model was employed to analyze the factors influencing the decisions on credit uptake and amount of borrowed loan. Separate models were estimated for members and nonmembers of TB groups since they differed in volume and source of loan accessed.

Findings

Results reveal that age of the woman and innovativeness negatively influenced credit access, whereas education level, participation in off-farm activities, number of farm enterprises, perception on interest rate, extension contacts and financial knowledge positively influenced the decision to access credit. On the other hand, participation in off-farm activities, risk-taking behavior, total land size, extension access and financial knowledge were statistically significant with positive correlation on the amount of loan borrowed. Significant factors differ between members and nonmembers of TB groups implying divergence in underlying credit access challenges once one has joined such groups.

Research limitations/implications

The study did not consider supply-side factors affecting the amount of loan accessed by women farm-entrepreneurs.

Originality/value

To the best of the authors’ knowledge, this paper is one of the pioneer studies using the double hurdle model to analyze factors influencing the extent of credit access specifically among women farm-entrepreneurs and carrying out the analysis by membership in TB groups.

Details

Agricultural Finance Review, vol. 82 no. 1
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 18 December 2019

Huy Duc Dang, Au Hai Thi Dam, Thuyen Thi Pham and Tra My Thi Nguyen

The purpose of this paper is twofold: to explain access to formal and informal credit in agriculture of Vietnam; and to compare the effectiveness between regular econometrics and…

Abstract

Purpose

The purpose of this paper is twofold: to explain access to formal and informal credit in agriculture of Vietnam; and to compare the effectiveness between regular econometrics and machine learning techniques.

Design/methodology/approach

The multinomial logit (MNL) regression model and the random forest (RF) technique are employed for comparison purposes. To avoid heteroskedasticity, the robust covariance matrix is computed to estimate the sandwich estimator which in turn provides an asymptotic covariance matrix for biased estimators. Additionally, multicollinearity is tested among independent variables with variance inflation factors less than 3. Adequacy approach and sensitivity analysis are used to determine relevant levels of predictors. For models comparison, statistical evaluation metrics including Cohen’s κ, mean absolute error, root mean squared error and relative absolute error are employed.

Findings

The discrepancy between sensitivity analysis and adequacy approach revealed that MNL is more compatible for explaining determinants of credit participation. Due to insignificant differences in the evaluation metrics between models, the winner of choice is undetermined. Among other determinants, collateral, farmsize, income, procedure, literacy and all risk variables stand out to be critical factors when deciding borrowing schemes. While financially literate farmers tend to acquire loans from both sources, borrowing decisions against different risk sources depend on risk type and famers’ own desire to borrow.

Originality/value

Results of the MNL model are more consistent with literatures, which reinforce the role of collateral in the local credit scheme. Besides, financial literacy and farmers’ perception on different risk sources also influence how farmers’ borrowing strategies vary among sources.

Details

Agricultural Finance Review, vol. 80 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 29 June 2023

Annkathrin Wahbi, Yaw Sarfo and Oliver Musshoff

Digital credit is spreading rapidly across Sub-Saharan Africa and holds potential for financial inclusion and female financial autonomy. Women in developing economies have long…

Abstract

Purpose

Digital credit is spreading rapidly across Sub-Saharan Africa and holds potential for financial inclusion and female financial autonomy. Women in developing economies have long been targeted by microfinance institutions due to the women’s reliability and positive spillover effects. Yet, adoption rates for digital financial innovations remain moderate among rural women in Sub-Saharan Africa. The authors explore whether female preferences for digital and conventional credit differ from males.

Design/methodology/approach

The authors conduct a Discrete Choice Experiment with 420 smallholder farmers in central Madagascar, one of the region's poorest countries, to assess preferences for selected digital and conventional credit attributes.

Findings

Results of the mixed logit model and the comparison of the willingness-to-pay via Poe-test suggest high general demand for both credit forms. The demand of female respondents is higher than that of males, suggesting that they might be underserved. This holds for both credit forms. However, differences in willingness to pay for the credit attributes are mostly not statistically significant, indicating that designing gender-specific services may not be advisable.

Originality/value

This article is believed to be the first to assess and compare gendered willingness to pay for digital and conventional credit. The study’s findings give valuable insights to decision-makers in development politics as well as the fintech industry.

Details

Agricultural Finance Review, vol. 83 no. 4/5
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 27 February 2024

George Okello Candiya Bongomin, Elie Chrysostome, Jean-Marie Nkongolo-Bakenda and Pierre Yourougou

The main purpose of this paper is to establish the mediating effect of credit counselling in the relationship between access to microcredit and survival of micro small and…

Abstract

Purpose

The main purpose of this paper is to establish the mediating effect of credit counselling in the relationship between access to microcredit and survival of micro small and medium-sized enterprises (MSMEs) in developing countries in sub-Saharan Africa post COVID-19 pandemic with data collected from rural Uganda.

Design/methodology/approach

Structural equation modelling (SEM) through SmartPLS 4.0 was used to generate the standardized parameters to test whether credit counselling mediates the relationship between access to microcredit and survival of MSMEs in developing countries in sub-Saharan Africa post COVID-19 pandemic with data collected from rural Uganda.

Findings

The SEM bootstrap results revealed that credit counselling enhances access to microcredit by 27% to promote survival of MSMEs in developing countries in sub-Saharan Africa post COVID-19 pandemic with data collected from rural Uganda.

Research limitations

The current study focused only on women MSMEs. Future studies may possibly collect data from all the MSMEs to draw better generalization of the findings within the sector.

Practical implications

The findings can help public finance policy to ensure provision of credit counselling to microentrepreneurs who borrow from different financial institutions to reduce the problem of loan defaults and delinquency rampant in lending. This could be done through conducting routine business education and counselling sessions for microentrepreneurs who often need credit to grow their businesses.

Originality/value

This study is amongst the first few studies to establish the mediating effect of credit counselling in the relationship between access to microcredit and survival of MSMEs in developing countries in sub-Saharan Africa in the aftermath of COVID-19 pandemic with data collected from rural Uganda. There is a dearth in literature and theory on the rehabilitative and preventive role of credit counselling in reducing repayment defaults amongst borrowers within the credit market to spur survival of MSMEs seen as the main enabler of economic growth, especially in developing countries. In fact, credit counselling acts as a safety net by substituting financial literacy and education to solve the rampant problem of overindebtedness amongst borrowers who are debt illiterate within the credit market.

Details

Journal of Entrepreneurship and Public Policy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2045-2101

Keywords

Article
Publication date: 14 February 2022

Latif Apaassongo Ibrahim, Takeshi Sakurai and Towa Tachibana

Product quality standardization is the solution to market collapses due to quality-insensitive pricing regimes prevalent in West African (WA) rice value chains. However, access to…

Abstract

Purpose

Product quality standardization is the solution to market collapses due to quality-insensitive pricing regimes prevalent in West African (WA) rice value chains. However, access to local rice that is differentiated by quality standards is limited. This paper explores feasibility of quality standardization of local rice and evaluates how its price–quality connecting effect depends on retailer characters/reactions.

Design/methodology/approach

This study uses panel data from a wholesale randomized control trial (RCT) and three surveys of 135 rice retailers in Ghana.

Findings

Improved local food value chains and access to quality differentiated products are impactful entry points for import substitution policies. The strength of interretailer competition, retail infrastructure and wholesaler activities matter for a stronger connection of prices and quality, given uptake of quality-standardized local rice.

Research limitations/implications

Access to quality-differentiated local rice can be increased via private and third-party certification. This addresses the prevailing inefficient pricing and its related problems. The positive impacts of such access would be magnified by designing quality certification interventions to elicit regular-frequent purchases by retailers and target retailers with adequate retail infrastructure in high competition areas. However, this study only explored profitability and opportunities for strategic behavior as the behavioral basis for quality-sensitive pricing. Other impact mechanisms could be explored in further research that includes consumer data.

Originality/value

Despite their difficulty and limited use in value chains studies, RCT and panel data methods are used. This study is the first to empirically analyze feasibility of introducing product standardization, a missing institution in the WA local rice markets.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 13 no. 4
Type: Research Article
ISSN: 2044-0839

Keywords

Article
Publication date: 19 January 2021

Eric N. Okoyo, Muluken Gezahegn Wordofa, Jemal Y. Hassen and Moges Bezabih

This study is conducted to evaluate the impact of rural credit on farm household income and food security.

Abstract

Purpose

This study is conducted to evaluate the impact of rural credit on farm household income and food security.

Design/methodology/approach

A multistage random sampling procedure is implemented to select 180 (82 credit user and 98 non-credit user) households from Kurfa Chele district, eastern Ethiopia. The Propensity Score Matching technique is used to estimate the impact of credit utilization on the welfare indicators.

Findings

The results of the econometric model estimation show that participation in the rural credit program was positively influenced by a household's educational status, family size, voluntary saving and participation in training related to credit and saving. On the contrary, livestock holding and extension advice were found to negatively affect participation. Furthermore, participation in rural credit program is found to increase annual income by 59% and calorie intake by 21%. These are significant results implying that participation in the rural credit and saving program improved household welfare in the study area.

Originality/value

This study is important because it shows the welfare impact of making credit program available to potential users in the study area. Moreover, for effectiveness of the credit program it is necessary to target households with relatively larger family size and those with relatively better education (to induce change among the wider farming community). It is also essential to focus on the saving behavior of the program beneficiaries and enhancing the management system by ensuring that sufficient development agents are in place.

Details

Agricultural Finance Review, vol. 81 no. 4
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 7 September 2018

Abdul-Hanan Abdallah, Micheal Ayamga and Joseph A. Awuni

The purpose of this paper is twofold: to determine the factors contributing to farm income in the Transitional and Savanna zones of Ghana and to ascertain variations between in…

Abstract

Purpose

The purpose of this paper is twofold: to determine the factors contributing to farm income in the Transitional and Savanna zones of Ghana and to ascertain variations between in the same and across the two locations; and to determine the impact of credit on farm income in each of the two zones and to ascertain the variation in impact of credit across the two locations.

Design/methodology/approach

In order to address endogeneity and sample selection bias, the authors draw from the theory of impact evaluation in nonrandom experiment, employing the endogenous switching regression (ESR) while using the propensity score matching (PSM) to check for robustness of the results.

Findings

The results show significant mean differences between some characteristics of households that have access to credit and those that did not have access. Further, the results revealed farm size, labor; gender, age, literacy, wealth and group membership as the significant determinants of both credit access and income in the two zones. With the ESR, credit access increases households farm income by GH¢206.56/ha and GH¢39.74/ha in the Transitional and Savanna zones, respectively, but with the PSM, credit increases farm income by GH¢201.50 and GH¢45.69 and in the Transitional and Savanna, respectively.

Research limitations/implications

The mean differences in characteristics of the households revealed the presence of selection bias in the distribution of household’s covariates in the two zones. The results further indicate the importance of productive resources, information and household characteristics in improved access to credit and farm income. Also, the results from both methods indicate that credit access leads to significant gains in farm income for households in both zones. However, differences exist in the results of PSM and that of the ESR results.

Practical implications

The presence of selection bias in the samples suggests that the use of ESR and PSM techniques is appropriate. Further, the results suggesting that enhanced credit access and farm income could be attained through improved access to household resources and information. The results also suggest the need for establishing and expanding credit programs to cover more households in both zones. The differential impact of credit between the two methods employed in each zone revealed the weakness of each model. The low values from PSM could indicate the presence of selection bias resulting from unobservable factors whiles the high values from the ESR could stem from the restrictive assumption of the model. This reinforces the importance of combining mixed methods to check robustness of results and to explore the weakness of each method employed.

Originality/value

The novelty of this study lies in the use of a very extensive and unique data set to decompose the determinants of credit access and farm income and as well as the impacts of credit into zones.

Details

Agricultural Finance Review, vol. 79 no. 1
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 17 October 2018

Oanh Dinh Yen Nguyen and John F. Cassidy

There is limited research on consumer intention and credit card adoption in the transitional economies of Southeast Asia. The purpose of this paper is to investigate the key…

1000

Abstract

Purpose

There is limited research on consumer intention and credit card adoption in the transitional economies of Southeast Asia. The purpose of this paper is to investigate the key elements that influence an individual’s intention of adopting credit cards in the transitional economy Vietnam.

Design/methodology/approach

A questionnaire was developed based on the technology adoption literature. After data cleaning, 595 responses were deemed valid. Factor analysis (EFA and CFA) was utilized on split samples, and a structural equation model developed to identify the influential technology adoption factors.

Findings

The analysis found strong support for the hypotheses theoretically developed. In the transitional economy of Vietnam, consumer’s intention to adopt credit cards was influenced by “Perceived usefulness (PU),” “Perceived ease of use (PEOU),” “subjective norm (SN),” “perceived self-efficacy (PSE)” and “Anxiety”. However, “perceived financial cost (PFC)” was not a significant factor.

Research limitations/implications

The use of cross-sectional data does not enable the analysis of time sequence of the determinants of consumer intention.

Practical implications

This research provides a body of knowledge on modern banking payment systems and credit card utilization factors in the transitional economy of Vietnam which has relevance for other transitional as well as developing economies of Southeast Asia, and is a good reference source for foreign investors, banks and card service companies.

Originality/value

To date, there are no studies that explore the interaction between “PU,” “PEOU,” “PFC,” “SN,” “PSE,” “Anxiety” and “Behavioral Intention” in the context of the Vietnamese credit card market, nor other transitional markets in Southeast Asia.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 30 no. 4
Type: Research Article
ISSN: 1355-5855

Keywords

Article
Publication date: 1 September 2006

Mark C. Freeman, Paul R. Cox and Brian Wright

This paper aims to explore the possible use of credit derivatives by corporate treasurers. Corporations have, in recent years, grown comfortable with the idea of using traditional…

8843

Abstract

Purpose

This paper aims to explore the possible use of credit derivatives by corporate treasurers. Corporations have, in recent years, grown comfortable with the idea of using traditional derivative products to hedge their exposure to, for example, interest rate and foreign exchange risk. Credit risk, on the other hand, has proven a more difficult animal to tame. Whilst avenues for the management of credit risk do exist, for example, by the use of traditional insurance products and letters of credit, such means are not always convenient.

Design/methodology/approach

In this paper, both the academic and practitioner literature on credit derivatives and their application are reviewed. Then, by means of some simple numerical examples, the possible uses to which corporate treasurers might put credit default swaps and total return swaps are illustrated.

Findings

The credit derivatives market is, at present, dominated by large banks and insurance companies who trade credit exposure among themselves. As the credit derivatives market becomes more liquid and transparent, it is asked: “Should corporate treasurers consider using credit derivatives to manage their credit risk exposure?” A number of simple and practical ways in which corporations can use credit derivatives to manage risk are explored and the practical strengths and weaknesses of following such approaches are emphasised.

Originality/value

This paper is of particular value to corporate treasurers. This is one of the first academic papers to consider credit derivatives from a financial management perspective.

Details

Managerial Finance, vol. 32 no. 9
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 19 December 2023

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.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2044-0839

Keywords

11 – 20 of over 1000