Search results

1 – 2 of 2
To view the access options for this content please click here
Article
Publication date: 13 March 2017

Temesgen Fitamo Bocher, Bamlaku Alamirew Alemu and Zerihun Getachew Kelbore

The purpose of this paper is to investigate how credit access affects the welfare of households and sheds light on how household characteristics influence the decision to…

Abstract

Purpose

The purpose of this paper is to investigate how credit access affects the welfare of households and sheds light on how household characteristics influence the decision to take credit and the efficiency in credit use.

Design/methodology/approach

This study uses data from the fourth round of the Ethiopian Rural Household Survey conducted in 2009, and examines factors that determine the decision to take credit and the effect of such decision on household welfare. The household welfare variable is measured by the food security indicator and total food expenditure. The study employs endogenous Regime Switching model to account for endogeneity in access to credit and self-selection bias in the decision to participate in credit.

Findings

The result from the kernel distribution shows households with access to credit have more consumption expenditure than those without access to credit. The ordinary least square regression shows that access to credit increases total consumption by 12 percent without considering self-selection bias. Participation in non-farm activity increases the demand for credit by 17 percent. Land holding, household size, and participation in saving associations increase the probability of getting credit by 5, 11, and 20 percent, respectively. Access to credit appears to have a positive impact on food security in both actual and counterfactual cases for the current credit receivers.

Originality/value

This study provides a thorough analysis of the impacts of access to credit on household welfare in Ethiopia. The study contributes to the debate on the link between access to credit and household welfare and provides valuable input for policy makers.

Details

African Journal of Economic and Management Studies, vol. 8 no. 1
Type: Research Article
ISSN: 2040-0705

Keywords

To view the access options for this content please click here
Article
Publication date: 13 March 2017

Daniel Makina

The purpose of this paper is to explore the landscape of financial services in Africa through the prism of a selection of research papers.

Abstract

Purpose

The purpose of this paper is to explore the landscape of financial services in Africa through the prism of a selection of research papers.

Design/methodology/approach

This is a review of literature that focusses on access to financial services (i.e. financial inclusion) and empirical findings from research papers in this issue of the journal.

Findings

The landscape of financial services in Africa is as heterogeneous as the countries comprising the continent. Common features include low levels of financial inclusion, low financial literacy, constrained access to credit, costly credit when available, gender discrimination in account ownership, and use and inefficient foreign exchange markets. Nevertheless, there are promising innovations, especially the mobile money innovation, which have the potential to foster more inclusive financial systems.

Originality/value

All the papers in this volume are based on original research shedding new insights on various aspects of financial services in Africa.

Details

African Journal of Economic and Management Studies, vol. 8 no. 1
Type: Research Article
ISSN: 2040-0705

Keywords

1 – 2 of 2