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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.

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.

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.

The paper is limited to using secondary data. Therefore, empirical investigation can be carried out to strengthen the validation of the model.

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.

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.

Lack of access to credit is commonly held responsible for slow agricultural and rural development in low- and middle-income countries. This paper aims to investigate the contribution of demand- and supply-side factors, particularly the role of risk rationing, on credit application and uptake in the case example of Kyrgyzstan.

Toward this aim, the study explores the determinants of credit behavior of 1,738 Kyrgyz sample farm households from 2013 to 2016 waves of the nationally representative “Life in Kyrgyzstan” (LIK) dataset along a hierarchical regression model, differentiating between factors influencing individual demand for credit and factors influencing supply for credit.

The results of our analysis indicate the relative importance of demand-side factors for credit applications, reflecting farmers' perceived risk of credit default and loss of collateral. Meanwhile, supply-side factors, such as real credit constraints and collateral requests, have a stronger influence on credit uptake rates and overall loan sums. These findings highlight the role of risk rationing for agricultural investment, suggesting a stronger focus of development policy on improving risk-sharing mechanisms for farmers, e.g. by developing the agricultural insurance sector.

The paper contributes novel evidence on the role of risk rationing in shaping the demand for formal credits for increasing agricultural and rural investment in low-income transition economies. Previous research has mostly focused on the role of credit supply, thus underrating the potential contribution of individual risk attitude, risk experience and risk sharing.

The purpose of this paper is to investigate the relationships between business risks and credit choices of 400 farm households surveyed in Shaanxi province in October 2007 in the Yangling district. More specifically, this paper investigates whether or not rural farm households in China balance business risks from agricultural production with financial risk from the use of debt.

The data were collected through a survey of 400 farm households in Shaanxi province conducted in October 2007. Four separate regressions are run using a credit measure as the dependent variable and measures of profitability, risk, risk aversion, and demography, and debt source (formal versus informal lending) as independent variables.

The model shows evidence of risk balancing. That is, there is strong evidence that Chinese farmers reduce credit use and financial risk, as business risks increase.

The results suggest that Chinese policy makers could encourage the use of finacial leverage and prudent debt use by offering risk reducing programs such as crop insurance, weather insurance, or price insurance.

This paper uses a unique survey form to collect production risk data as well as gather information on credit use and sources. Data were collected so that risk measures could easily be computed using a triangular distribution. Furthermore, this is believed to be the first empirical validation of the risk balancing hypothesis.