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billion taka) 8.5 69.0 12.4 No. of borrowers (’000) 552.9 6,651.3 8.3 2012–2013 Disbursement (in billion taka) 21.5 163.2 13.2 Loan outstanding (in billion taka) 10.5 91.2 11.5 No. of borrowers (’000) 668.2 7,865.8 8.5 2013–2014 Disbursement (in billion taka) 25.0 184.6 13.6 Loan outstanding (in billion taka) 12.3 105.... | agricultural-finance-developing-countries.pdf | Agricultural management |
loan as ones that are disbursed under the Sufolon project. Fiscal years end in June, unless otherwise noted. Source: Palli Karma-Sahayak Foundation annual reports, various issues. In the portfolio of MFI lending to microenterprises, trade loans are dominant in 2016–2017, while agriculture loans have the highest share i... | agricultural-finance-developing-countries.pdf | Agricultural management |
financial institutions. Unlike commercial banks and agricultural development banks, most of the MFIs in Bangladesh (with the exception of Grameen Bank) are not legally bound to mobilize savings from public at large. 11 Agricultural finance also includes other services such as payments (e.g., remittances) and insurance.... | agricultural-finance-developing-countries.pdf | Agricultural management |
between lending and savings can help cover the cost of lending, including default cost. Tables 5.4a and 5.4b present the lending and deposit rates of agricultural development banks, while Table 5.5 presents those of MFIs. If we compare the lending–savings margins among state-owned agricultural development banks and MFI... | agricultural-finance-developing-countries.pdf | Agricultural management |
Can Support Agriculture Table 5.4b: Efficiency of Bangladesh Krishi Bank Fiscal Year (June) 2010–2011 2011–2012 2013–2014 2014–2015 Total borrower 848,434 839,958 885,179 861,154 Deposit in million Tk 129,605 144,683 178,006 198,912 Loans outstanding in million Tk 139,491 149,296 173,182 179,960 Deposits/loans outstan... | agricultural-finance-developing-countries.pdf | Agricultural management |
and ρ is the expected financial loss per unit of principal lent or simply the loan default rate. Operational self-sufficiency equals operating income/total operating expense. Source: RAKUB (2009–2013). continued on next page Agricultural Finance in Developing Countries: Challenges and Opportunities 176 Table 5.4b: Con... | agricultural-finance-developing-countries.pdf | Agricultural management |
Average 2015 2017 2015 2017 2015 2017 2015 2017 2015 2017 Active borrowers (million) 5.36 6.79 4.92 5.74 7.18 8.93 1.6 3.4 9.2 11.7 Women borrowers (%) 91.6 91.3 87.4 87.0 _ 96.7 96.0 99.3 94.6 95.8 Assets (billion $) 1.468 2.240 2.108 2.233 2.7 2.804 0.04 0.08 0.2 0.3 Loan outstanding (billion $) 1.129 1.919 1.437 2.0... | agricultural-finance-developing-countries.pdf | Agricultural management |
means information was not submitted to MIX. Figures above are average numbers. Since MIX Market accepts voluntarily submitted data, total figures would be misleading. In this case, averages are more representative. Fiscal year ends in June, unless otherwise noted. $1 = Tk81. 2. Lending interest rate equals amount of in... | agricultural-finance-developing-countries.pdf | Agricultural management |
is defined by operating expenses as a percentage of average gross loan portfolio or total assets.13 A second way to measure efficiency is by assessing an organization’s financial efficiency, determined by whether the cost per unit of the principal lent is equal to the rate of interest charged to the borrowers. This mea... | agricultural-finance-developing-countries.pdf | Agricultural management |
it mobilizes, as its deposit/loan outstanding rate is close to 100% over the study period (2013–2015). However, none of these agricultural development banks is cost-efficient, meaning that they cannot recover their operating costs. Both banks are running at huge losses and are sustained by government money. 13 Operatio... | agricultural-finance-developing-countries.pdf | Agricultural management |
loans outstanding), none of the MFIs, including Grameen Bank, was efficient in 2015 or 2017 (because the break-even rate is lower than the average lending rate). Thus, although the MFIs managed to cover their operating costs, they failed to recover the full cost of operation during those two periods. Of course, this do... | agricultural-finance-developing-countries.pdf | Agricultural management |
huge losses due to bad debts and high operating costs. Agricultural Finance in Developing Countries: Challenges and Opportunities 180 One critical factor underlying the differences in the performance of agricultural development banks and MFIs is that the government determines the lending rate for agricultural developme... | agricultural-finance-developing-countries.pdf | Agricultural management |
Bangladesh have over 180 million registered accounts (60 million active), facilitating a range of transactions (such as cash-ins, cash-outs, and transfers) amounting to over Tk29 billion a day (Bangladesh Bank 2022). MFS were also instrumental to disbursing government transfer payments to millions of beneficiaries duri... | agricultural-finance-developing-countries.pdf | Agricultural management |
Bangladesh Bank statistics, the registered MFS accounts increased 21% during March 2020– December 2020, which was the height of the pandemic. In contrast, the growth rate of MFS accounts was 16% during the same period of the previous year. Similarly, the country also experienced an explosion in e-commerce transactions ... | agricultural-finance-developing-countries.pdf | Agricultural management |
income by 0.2%. 14 bKash is the most prominent MFS in Bangladesh. Agricultural Finance in Developing Countries: Challenges and Opportunities 182 5.4 Agriculture Finance: Status at the Household Level Farmers’ access to institutional finance may be defined by the percentage of farmers with an account with a financial i... | agricultural-finance-developing-countries.pdf | Agricultural management |
discussion of financial inclusion comes from the World Bank’s Global Financial Inclusion (Findex) data of 2021. Farmers are defined as those who sell some or all of their agricultural output in the market and are in the middle of the landholding distribution. Subsistence farmers, who consume most of what they produce, ... | agricultural-finance-developing-countries.pdf | Agricultural management |
2021 (%) Income Profile Farmers (9.8%) Nonfarmers (91.2%) Has account Borrowed Formal borrowing Borrowed for ag/busa Obs. Has account Borrowed Formal borrowing Borrowed for ag/bus Obs. Poorest 58.7 61.0 19.9 7.9 33 (55) 40.9 43.7 12.7 6.0 160 (125) 63.4 56.8 13.0 8.2 42 (50) 49.8 49.1 15.1 5.8 159 (142) Middle 72.2 50.... | agricultural-finance-developing-countries.pdf | Agricultural management |
developing world.17 17 Income matters for the status of financial account among farmers; income is slightly higher among the highest income group, as are the chances of borrowing from formal sources. Thus, 74% of farmers in the highest income group have a financial account, compared to 58.7% in the lowest income group.... | agricultural-finance-developing-countries.pdf | Agricultural management |
of borrowing or lending from formal sources are high in these countries. As Table 5.6 shows, among farmers in Bangladesh, only 11.1% borrowed for productive activities such as agriculture and business. The corresponding percentage is 14.6% in India and 18.4% in the developing world. This means that probably only a smal... | agricultural-finance-developing-countries.pdf | Agricultural management |
Development Studies and the Institute for Microfinance, in partnership with the World Bank. This is a household-level panel survey that covers 1,500 rural households across 105 villages in 1991–1992, 1998–1999, and 2010–2011 (for details, see Khandker, Khalily, and Samad 2016). However, for various borrowing purposes, ... | agricultural-finance-developing-countries.pdf | Agricultural management |
volume, accounting for 65% of the total borrowing by members of microfinance in 2010–2011 (versus 29% for informal finance). 18 Formal finance includes loans from commercial banks and agricultural banks. 19 Note that nonparticipants also include households that are well-off and hence can access formal finance. Agricult... | agricultural-finance-developing-countries.pdf | Agricultural management |
share of loans from all sources—from 28% in 1998–1999 to 33% by 2010–2011 (the change is statistically significant at the 1% level). 187 Bangladesh: How Microfinance Can Support Agriculture Table 5.8: Distribution of Main Purpose by Source of Borrowing (%) Borrowing Source Farm-Sector Activities Non-Farm-Sector Activi... | agricultural-finance-developing-countries.pdf | Agricultural management |
including income from farm and nonfarm sources. Following earlier work with the data, we estimate the credit effect by borrowers’ gender from both MFIs and formal sources (commercial and agricultural development banks). Agricultural Finance in Developing Countries: Challenges and Opportunities 188 The outcomes (Yi ) (e... | agricultural-finance-developing-countries.pdf | Agricultural management |
where t = {1,2} is the survey round, ηit is an unobserved determinant of the outcome that is time-variant, μi is an unobserved determinant of the outcome that is time-invariant, and εit is a non-systematic error, as previously defined. With the panel data, the household FE estimation technique can eliminate the time‑in... | agricultural-finance-developing-countries.pdf | Agricultural management |
MFIs) using the p-score-weighted FE method. We consider the effects for two types of farm income (crop and non‑crop), as well as for total farm income. We also show the effects on nonfarm income from all types of nonfarm enterprise activities. As Table 5.9 suggests, we find no significant effect (either positive or neg... | agricultural-finance-developing-countries.pdf | Agricultural management |
unobserved factors and matching balances treated and untreated units to control for time-varying unobserved factors (Angelucci and Attanasio 2013). While both p-weighting and matching can handle time-varying unobservables, weighting might be better than matching, as the latter can drop a good number of observations in ... | agricultural-finance-developing-countries.pdf | Agricultural management |
to a statistical significance of 10% and 5% or less. Regressions include more control variables at the household level (e.g., age, sex, and education of household head; log of land assets) and village level (e.g., price of consumer goods; male and female wages; infrastructure, including schools and electricity availabi... | agricultural-finance-developing-countries.pdf | Agricultural management |
allocating resources efficiently and thus cause them to suffer from efficiency losses. Therefore, it is worth considering how supply-side factors driving demand for microfinance or formal finance may affect farm households’ income and productivity. Before turning to this issue, we would like to compare the pattern of s... | agricultural-finance-developing-countries.pdf | Agricultural management |
way in the sense that if a household has multiple loans and it is constrained in one loan only, the household is considered credit-constrained. 23 We assume here that supply-side constraint is exogenously given to the households. We attempted to run an endogenous switching regression, but it did not converge. Agricultu... | agricultural-finance-developing-countries.pdf | Agricultural management |
(2013) and WB–InM (2010/2011). However, if we interact the supply-constraint status with the amount of borrowing alone, the direction of the change is unclear. Thus, we estimate the outcome of equation (3) after suppressing gender-specific effects, as well as the effects of other variables, for both types of borrowers,... | agricultural-finance-developing-countries.pdf | Agricultural management |
loans from microcredit (Tk) x household is credit‑constrained 0.011 (0.55) 0.011 (0.51) 0.003 (0.19) −0.004 (−0.13) Log men’s loans from formal sources (Tk) x household is credit‑constrained 0.030 (0. 55) −0.009** (−2.22) −0.018 (−0.54) −0.086 (−1.20) Log women’s loans from formal sources (Tk) x household is credit‑con... | agricultural-finance-developing-countries.pdf | Agricultural management |
gender of borrowers. For unconstrained households (loan variables without interaction), women’s credit from microcredit and men’s credit from formal sources matter to income growth. For example, a 10% increase in women’s borrowing from microcredit increases crop income by 0.2%, livestock income by 0.4%, and nonfarm inc... | agricultural-finance-developing-countries.pdf | Agricultural management |
expressed in natural logarithmic form. This gives us the credit effects in terms of the percentage change in outcomes due to percentage changes in the loan amount. An alternate way of expressing credit effects is in terms of marginal returns using monetary terms; for example, how much farm income goes up because of a T... | agricultural-finance-developing-countries.pdf | Agricultural management |
per Tk100 borrowed) Borrowing Variables Income from Crop Production Income from Livestock, Poultry, and Fishery Total Farm Income Total Nonfarm Enterprise Income Credit-unconstrained households Men’s loan from microcredit –7.1 –2.3 –7.5 15.3** Women’s loan from microcredit 0.8* 1.1** 2.1 26.7** Men’s loan from formal s... | agricultural-finance-developing-countries.pdf | Agricultural management |
in magnitude. In addition to marginal returns, credit effects can also be measured in terms of average returns to borrowing for all borrowers regardless of credit volume; this is called “average treatment of the treated.” To do so, we express the credit variables in terms of dummy variables as opposed to loan volumes; ... | agricultural-finance-developing-countries.pdf | Agricultural management |
−0.415 (−1.04) 1.00* (1.97) Women borrowed from formal sources −0.410 (−0.82) −0.431 (−0.44) 0.060 (0.09) 1.373 (1.48) Men borrowed from microcredit x household is credit-constrained 0.651* (1.91) −0.189 (−0.62) 0.089 (0.42) −0.127 (−0.04) continued on next page 197 Bangladesh: How Microfinance Can Support Agriculture ... | agricultural-finance-developing-countries.pdf | Agricultural management |
(e.g., price of consumer goods; male and female wages; infrastructure, including schools and electricity availability; and proportion of irrigated land). Sources: World Bank, Bangladesh Institute of Development Studies (2013) and WB–InM (2010/2011). 5.4.4 Is Borrowing from Institutional Sources Cost‑Effective for Farm... | agricultural-finance-developing-countries.pdf | Agricultural management |
the average lending rate of agricultural development banks (8%).25 If men borrow from a microcredit source to support rural nonfarm activities, the average return is about 14%, which is much lower than the average MFI lending rate of 20%. However, if men borrow from formal sources to support rural nonfarm activities, t... | agricultural-finance-developing-countries.pdf | Agricultural management |
and commercial banks) and semiformal sources (e.g., microfinance) can help rural households smooth risks and access inputs and other technologies with which to modernize agriculture and improve farm/nonfarm linkages. This chapter evaluates the Government of Bangladesh’s agricultural credit policy, which extends credit ... | agricultural-finance-developing-countries.pdf | Agricultural management |
tend to be women, who rarely receive loans from commercial banks or agricultural development banks. Hence, commercial banks and MFIs generally do not directly compete. Nonetheless, there remains fierce competition among MFIs themselves over product and client diversification. MFIs and agricultural development banks bot... | agricultural-finance-developing-countries.pdf | Agricultural management |
8% borrow from financial institutions. In addition, of the 56% of borrowers in Bangladesh, only 4% use their loans for productive purposes such as agriculture and businesses. Using detailed household panel data spanning the 1998–2011 period, we find that MFI participation in Bangladesh has a significant positive effect... | agricultural-finance-developing-countries.pdf | Agricultural management |
27%, which is much higher than the deposit rate and the rate they pay for the funds borrowed from PKSF. PKSF is, in turn, funded by the Government of Bangladesh and donors such as the World Bank. MFIs could extend their services to cover more farmers if they were allowed to mobilize savings through specialized banks li... | agricultural-finance-developing-countries.pdf | Agricultural management |
regulations, must promote a level playing field for all actors in order to support a competitive environment in which the rural financial system can thrive. Agricultural Finance in Developing Countries: Challenges and Opportunities 202 REFERENCES Angelucci, M., and O. Attanasio. 2013. The Demand for Food of Poor Urban ... | agricultural-finance-developing-countries.pdf | Agricultural management |
Report on Emergency Cash Transfer through Digital Wallets During COVID-19 Pandemic. The Business Standard. 2021. Disbursement of Allowances through MFS Ensures Transparency, Reduces Hassles. The Business Standard. 19 August. https://www.tbsnews.net/economy/banking/disbursement-allowancesthrough-mfs-ensures-transparency... | agricultural-finance-developing-countries.pdf | Agricultural management |
5:37. Feder, G., L. J. Lau, J. Y. Lin, and X. Luo. 1990. The Relation between Credit and Productivity in Chinese Agriculture: A Model of Disequilibrium. American Journal of Agricultural Economics 72(5): 1151–1157. Foltz, J. 2004. Credit Market Access and Profitability in Tunisian Agriculture. Agricultural Economics 30:... | agricultural-finance-developing-countries.pdf | Agricultural management |
Credit Access: Using Randomized Supply Decisions to Estimate the Impacts in Manila. Working Paper. Abdul Latif Jameel Poverty Action Lab, Massachusetts Institute of Technology (MIT), Cambridge, MA. Khandker, S. R. 1998. Fighting Poverty with Microfinance: Experience in Bangladesh. New York: Oxford University Press. Kha... | agricultural-finance-developing-countries.pdf | Agricultural management |
in Rural Bangladesh. Journal of Development Studies 39(2): 1–24. Rajshahi Krishi Unnayan Bank (RAKUB). Various years. Annual Reports 2009– 2013. Rajshahi: Bangladesh Bank. Rosenburg, R. 2009. Measuring Results of Microfinance Institutions: Minimum Indicators That Donors and Investors Should Track: A Technical Guide. Co... | agricultural-finance-developing-countries.pdf | Agricultural management |
Bank-Bangladesh Institute of Development Studies Household Survey, 1998/1999. 207 India: Trends in Institutional Credit to Agriculture Gayatri B. Koolwal CHAPTER 6 6.1 India’s Agricultural Sector Expands, but Challenges Remain Over Productivity Growth This chapter uses various supplyand demand-side analyses to examine... | agricultural-finance-developing-countries.pdf | Agricultural management |
over whether agricultural finance leads to significant investments in agriculture, in addition to a supply-side analysis, we use the 2004–2005 and 2011–2012 panel rounds of the nationally representative Agricultural Finance in Developing Countries: Challenges and Opportunities 208 India Human Development Survey (IHDS) ... | agricultural-finance-developing-countries.pdf | Agricultural management |
who borrow do invest more in seeds and fertilizer, the broader effects of credit on agricultural investment and production tend to be concentrated among larger landowners. Better targeting of smaller farmers, including a clearer understanding of these farmers’ production and borrowing constraints, will be important in ... | agricultural-finance-developing-countries.pdf | Agricultural management |
investments in agriculture—including modernizing agricultural value chains and developing innovative technologies and inputs to improve productivity—more complex. Addressing food security among poor people also remains a central policy concern for India’s government, particularly in the face of a growing middle class i... | agricultural-finance-developing-countries.pdf | Agricultural management |
and plays a major role in the country’s food security,1 and significant challenges remain to productivity growth and food security. These challenges stem from natural resource depletion, climate variability, and the fragmentation of land holdings, all of which have placed growing stresses on crop production. 1 Also see... | agricultural-finance-developing-countries.pdf | Agricultural management |
new, sustainable approaches to farming. 2 Varshney et al. (2021). Figure 6.3: Growing Fragmentation of Operational Holdings Across Different Farming Sizes 0 20,000 60,000 40,000 80,000 100,000 Marginal Small Semi-medium Medium Large 120,000 Number (1000s) of holdings 1970–1971 1976–1977 1985–1986 1980–1981 1990–1991 ... | agricultural-finance-developing-countries.pdf | Agricultural management |
seeds (Ministry of Agriculture and Farmers Welfare 2016) and can also include cloned/counterfeit seeds. 213 India: Trends in Institutional Credit to Agriculture The expansion of institutional credit is important for improving agricultural productivity, but bank credit constitutes less than one-quarter of total agricult... | agricultural-finance-developing-countries.pdf | Agricultural management |
to agriculture has grown rapidly since the mid-2000s due to many policy shifts aimed at sustainably raising productivity growth and rural incomes (Box 6.1), although growth slowed in recent years leading up to the COVID-19 pandemic. Historically, banks in India have been required to lend 40% of their total credit to “p... | agricultural-finance-developing-countries.pdf | Agricultural management |
as pledging crops to secure a loan, for loans of up to ₹100,000. 2004–2005 The government introduced a comprehensive credit policy, pledging to double the amount of agricultural credit across institutional sources over a 3-year period, including expanding targeting of smaller farmers and expanding the number of self-h... | agricultural-finance-developing-countries.pdf | Agricultural management |
The Government of India has been introducing additional stimulus programs to digitize KCC as well as reduce effective interest rates that farmers face on bank loans. 215 India: Trends in Institutional Credit to Agriculture Box 6.2: Main Sources of Institutional Lending for Agriculture Banks • Cooperative banks: Coop... | agricultural-finance-developing-countries.pdf | Agricultural management |
provide credit to SHGs against a group guarantee, and members of the group stand as collective guarantors. Banks allow the members of the SHGs to decide which members of the group will borrow and how much, as well as how the loan will be repaid. These loans started out as term loans, which members are expected to repay... | agricultural-finance-developing-countries.pdf | Agricultural management |
between 2015–2016 and 2019–2020 (Chavan and Ramakumar 2022; Ramakumar 2022). Just before and after the onset of the pandemic in 2020, year-on-year growth rates declined substantially, with some recovery in 2021 but still far less growth than in 2019 (Figure 6.6). Figure 6.6: Year-on-Year Growth Rates (Percentage by Q... | agricultural-finance-developing-countries.pdf | Agricultural management |
of investment for banks due to a variety of factors, including climate-related fluctuations that contribute to water shortages, inadequate storage facilities and transport/ marketing channels, poor management of land records and difficulties in establishing land rights (as land is a major source of collateral), and a r... | agricultural-finance-developing-countries.pdf | Agricultural management |
an increase in farmers defaulting on their loans. A recent study using district-level panel data between 2001 and 2012 found that the debt waiver and relief program actually induced many banks to shift away from districts with greater risk by allowing these banks to clean their books of consistently underperforming or ... | agricultural-finance-developing-countries.pdf | Agricultural management |
“branchless banking” (in which a large network of business correspondents are assigned to different villages and use mobile devices to help families conduct financial transactions). Along with reducing the costs of establishing physical bank branches, branchless banking has been shown to help improve savings among the ... | agricultural-finance-developing-countries.pdf | Agricultural management |
nationally representative India Human Development Survey shows that about 57% of agricultural households have a deposit or savings account with a bank; similarly, the 2014 Findex sets this figure at 63%. However, account ownership can vary substantially by farmers’ landholdings/wealth, and many accounts are seldom used... | agricultural-finance-developing-countries.pdf | Agricultural management |
a financial system was 88% in both 2017 and 2021. However, the mobile financial services (MFS) rate among farmers was much lower than the financial account rate—it was only 2.5% in 2017 and 20.4% in 2021. In contrast, in neighboring Bangladesh, the MFS rate was 23.8% in 2017 and 45.7% in 2021, while the financial accou... | agricultural-finance-developing-countries.pdf | Agricultural management |
government’s ambitious target at the outset was 50% of cropped area to be covered in 3 years, although this target is likely to be reached more slowly.) To help expand farmers’ knowledge about crop insurance programs, as well as about market prices for agricultural outputs, the government has been involved in developin... | agricultural-finance-developing-countries.pdf | Agricultural management |
and for cultivator households specifically (using the nationally representative All-India Debt and Investment Survey, conducted roughly every 10 years), we see that the proportion of institutional loans among cultivators, relative to borrowing from all sources, rose until the early 1980s but has flattened/declined some... | agricultural-finance-developing-countries.pdf | Agricultural management |
people by providing easy credit at very high interest rates (20% or greater, according to the All-India Debt and Investment Survey, compared to 6%–15% among institutional sources). Table 6.1 also shows that farming households borrowing from institutional sources are much more likely to rely on banks, whereas non-cultiv... | agricultural-finance-developing-countries.pdf | Agricultural management |
MFI = microfinance institution, NBFC = nonbanking financial company. Source: All-India Debt and Investment Survey 2019. Overall, smaller farmers still face gaps in accessing institutional credit. Despite the expansion of institutional credit to agriculture, small and marginal farmers (those with landholdings of less th... | agricultural-finance-developing-countries.pdf | Agricultural management |
impact on outcomes for farmers, although the links between borrowing and agricultural income depend on factors including targeting/landholding size, product design, and the mode of credit delivery. Most of these studies have been based on an examination of aggregated (district/state-level) data. An early district-level... | agricultural-finance-developing-countries.pdf | Agricultural management |
Survey (IHDS) to understand the extent to which borrowing has been associated with increased expenditure on seeds and fertilizer, as well as 9 The time period and context of the study may matter as well—a dynamic panel analysis across 20 states over a shorter period, between 2001 and 2006, found that direct credit to a... | agricultural-finance-developing-countries.pdf | Agricultural management |
Regarding borrowing in particular, the IHDS asks about whether households have borrowed from different institutional and noninstitutional sources (banks/ government, microfinance/SHGs, moneylenders, an employer, friends/relatives, or other sources) and how many loans have been taken in the last 5 years, as well as abou... | agricultural-finance-developing-countries.pdf | Agricultural management |
HH agr land: 0.5< x <=1 acre 0.19 [0.39] 0.21 [0.41] HH agr land: 1< x <=2 acres 0.21 [0.40] 0.20 [0.40] HH agr land: 2< x <=4 acres 0.19 [0.39] 0.17 [0.37] HH agr land: 4< x <=10 acres 0.15 [0.36] 0.12 [0.32] HH agr land: >10 acres 0.05 [0.23] 0.04 [0.19] Number of Households 41,554 42,152 HH = household, SD = standar... | agricultural-finance-developing-countries.pdf | Agricultural management |
Trends in Institutional Credit to Agriculture Figure 6.9: Cultivators: Expenditure on Agricultural Inputs, Relative to per Capita Farm Income, by Landholdings Expenditure on agricultural inputs/relative to per capita farm income 0.0 0.5 1.5 2.0 HH agricultural land (acres) 0 2 4 8 6 10 1.0 Seeds Fertilizer Pesticides... | agricultural-finance-developing-countries.pdf | Agricultural management |
supply-side data discussed in section 6.2 and above in section 6.3—among cultivator households borrowing for agriculture, banks constituted the most common institutional source.12 At the same time, informal sources such as moneylenders and family/friends were also common, particularly among the smallest farmers. For cu... | agricultural-finance-developing-countries.pdf | Agricultural management |
[0.31] 0.08 [0.26] 0.06 [0.24] 0.05 [0.23] Total number of borrowing HH in agr: 179 297 514 673 679 271 HH = household, NGO = nongovernment organization, SHG = self-help group. Source: India Human Development Survey, 2011–2012 round. Reliance on SHGs for agricultural finance was small in the sample, although again, the... | agricultural-finance-developing-countries.pdf | Agricultural management |
rounds, we first estimate a borrowing regression to understand which socioeconomic factors among cultivators affect borrowing for agricultural and nonagricultural purposes. We faced constraints to this empirical approach due to the setup of the questionnaires and the data; in each round, the IHDS asks about the charact... | agricultural-finance-developing-countries.pdf | Agricultural management |
subsequent borrowing can help shed light on which communities or socioeconomic groups may need better targeted interventions. We estimate a household fixed-effects regression including state dummies interacted with time, accounting for clustering at the primary sampling unit level, and including state fixed effects int... | agricultural-finance-developing-countries.pdf | Agricultural management |
2012, reflecting the loan amount relative to total household consumption expenditure. Overall, equation (2) allows us to examine how new, relatively large loans in agriculture have been associated with changes in outcomes over the survey period. As with the borrowing regression, we estimate equation (2) via OLS, accoun... | agricultural-finance-developing-countries.pdf | Agricultural management |
shocks, such as crop failure and drought. Overall borrowing for different purposes was not fungible; only borrowing for agriculture specifically benefited agricultural investments and income. The results shown in Table 6.4 imply that larger landowners have benefited more from the expansion of agricultural credit. Table... | agricultural-finance-developing-countries.pdf | Agricultural management |
[2.06] 0 [−0.00] HH had large expenditure/loss (5Y): loss of jobs −0.101*** [−6.20] −0.008 [−0.51] HH had large expenditure/loss (5Y): marriage −0.019** [−2.53] 0.102*** [15.42] HH had large expenditure/loss (5Y): crop failure 0.118*** [23.98] −0.023** [−2.47] HH had large expenditure/loss (5Y): death −0.013 [−1.28] −0... | agricultural-finance-developing-countries.pdf | Agricultural management |
Pesticides (4) Agricultural Equipment Borrowed for Agriculture in Last 5 Years (prior to 2011) 0.7*** [2.98] 1.2*** [4.18] 0.5** [2.26] 0.5 [1.51] Loan Amount in Agriculture/ Total HH Expenditure 0.4** [2.37] 0.5** [2.35] 0.1 [1.27] 0.2 [1.29] Initial HH Chars (2005): Sex of HH head: male 0.3* [1.87] 0.4* [1.74] 0.4** ... | agricultural-finance-developing-countries.pdf | Agricultural management |
[−2.30] HH had large expenditure/loss (5Y): marriage −0.2 [−1.58] −0.4* [−1.91] −0.1 [−1.02] −0.5*** [−3.20] HH had large expenditure/loss (5Y): crop failure 0.3* [2.04] 0.04 [0.20] 0.4** [2.14] 0.6** [2.61] HH had large expenditure/loss (5Y): death −0.1 [−0.62] 0.2 [1.28] −0.1 [−0.67] −0.03 [−0.18] Observations 11,016... | agricultural-finance-developing-countries.pdf | Agricultural management |
−6.8 [−0.97] HH agr land: 2< x <=4 acres 0.9* [1.93] 0.04 [0.05] 9.3 [1.14] 0.7 [0.24] HH agr land: 4< x <=10 acres 2.7*** [3.83] 3.2** [2.65] 14.2 [1.30] 2.6 [0.62] HH agr land: >10 acres 6.4*** [5.04] 6.2*** [5.18] 13.3* [2.01] 16.3* [1.75] HH had large expenditure/loss (5Y): illness/accidents −0.1 [−0.19] 0.01 [0.01... | agricultural-finance-developing-countries.pdf | Agricultural management |
include allied activities such as livestock production, was not significantly associated with borrowing, but crop income specifically grew 8% more for those who borrowed than for those who did not. (As discussed earlier, agricultural borrowing in India is mainly targeted toward crops.) The results in Table 6.5 also sug... | agricultural-finance-developing-countries.pdf | Agricultural management |
as well as the amount of borrowing) has had a significant positive association with other input purchases, including pesticides and agricultural equipment, as well as with the area of land under production and irrigation. The positive link between borrowing and crop income observed in Table 6.5 also appears to come fro... | agricultural-finance-developing-countries.pdf | Agricultural management |
and household ethnicity fixed effects also included. 2. Additional variables controlled for are the same as in Table 6.5; those coefficients available upon request. 3. Nonagricultural reasons for borrowing included for a business, consumption, education, marriage, and housing. 4. Coefficients were multiplied by 100 ... | agricultural-finance-developing-countries.pdf | Agricultural management |
4 acres 0.5 [1.40] 2.0*** [4.10] 2,589 0.068 (c) Land: >4 acres 0.7* [1.95] 0.7** [2.41] 3,705 0.067 (3) Pesticides (a) Land: <=2 acres 0.1 [0.15] 0 [1.04] 4,722 0.009 (b) Land: >2 and <= 4 acres 0.3*** [3.24] 0.5** [2.51] 2,589 0.092 (c) Land: >4 acres 0.8*** [5.37] 0.3* [1.82] 3,705 0.073 (4) Equipment (a) Land: <=2... | agricultural-finance-developing-countries.pdf | Agricultural management |
[−0.80] 0.9 [0.69] 3,580 0.013 (2) Income from crops (a) Land: <=2 acres 6.1 [0.88] 5.2 [1.23] 3,974 0.063 (b) Land: >2 and <= 4 acres −1.4 [−0.55] −0.6 [−0.61] 2,231 0.009 (c) Land: >4 acres 10.8* [1.94] −0.7 [−0.72] 3,289 0.009 Notes: 1. Standard errors clustered at primary sampling unit level; robust t-statistics ... | agricultural-finance-developing-countries.pdf | Agricultural management |
Agriculture in Last 5 years (prior to 2011) (dummies): Size of Loan (share of loan amount to total expenditure): Banks/ Government NGOs/SHGs Banks/ Government NGOs/SHGs Coeff. T-stat Coeff. T-stat Coeff. T-stat Coeff. T-stat Obs R-sq. Outcome Regressions: Share of total agr. expenditure on: (A) Seeds (1) Land: <=2 acre... | agricultural-finance-developing-countries.pdf | Agricultural management |
production and irrigation for smaller farmers. Interestingly, however, the links between borrowing and investments in agriculture are stronger than the link between borrowing and overall income. Agricultural Finance in Developing Countries: Challenges and Opportunities 242 Table 6.8: Continued Coefficient Estimates o... | agricultural-finance-developing-countries.pdf | Agricultural management |
7.8 [0.90] −0.9 [−0.21] 3,974 0.063 (2) Land: 2–4 acres −0.6 [−0.20] −7.8 [−1.66] 0.5 [0.57] 1.8 [0.32] 2,212 0.009 (3) Land: >4 acres 9.6 [1.60] −1.9 [−0.61] −0.6 [−1.65] −0.5 [−0.04] 3,267 0.009 NGO = nongovernment organization, SHG = self-help group. Notes: 1. Standard errors clustered at primary sampling unit leve... | agricultural-finance-developing-countries.pdf | Agricultural management |
from districts with greater risk by allowing these banks to clean their books of consistently underperforming or nonperforming loans and move on to better-off districts. Both the supplyand demand-side analyses presented in this chapter show that success in targeting small and marginal farmers has been mixed, that farme... | agricultural-finance-developing-countries.pdf | Agricultural management |
which there was weaker evidence, consistent with other districtand state-level analyses (Binswanger and Khandker 1995; Narayanan 2016). Technical assistance for smaller farmers will be important in helping ensure that credit for agriculture is effective for raising productivity. REFERENCES Binswanger, H., and S. Khandk... | agricultural-finance-developing-countries.pdf | Agricultural management |
Services in Rural India. Journal of Development Economics 135(November): 160–175. 245 India: Trends in Institutional Credit to Agriculture Ministry of Agriculture and Farmers Welfare, Government of India. 2016. The State of Indian Agriculture 2015–16. Department of Agriculture, Cooperation and Farmers Welfare Directora... | agricultural-finance-developing-countries.pdf | Agricultural management |
and P. K. Joshi. 2021. India’s COVID-19 Social Assistance Package and Its Impact on the Agriculture Sector. Agricultural Systems 189. World Bank. 2012. India: Issues and Priorities for Agriculture. Washington, DC: World Bank Group. http://www.worldbank.org/en/news/feature/2012/ 05/17/india-agriculture-issues-priorities... | agricultural-finance-developing-countries.pdf | Agricultural management |
many developing countries. However, due to the increased risks in financing smallholder agriculture, formal and semiformal institutions’ lending portfolios tend to be skewed toward nonagricultural activities, even in predominantly rural settings. Because of the poor business operations of the existing financial institu... | agricultural-finance-developing-countries.pdf | Agricultural management |
access to institutional finance has been a priority of the governments in SSA. Given that medium and small farmers dominate agricultural activity in the region, boosting agricultural productivity through financing requires a clearer understanding of how such financing can help alleviate the constraints these farmers fa... | agricultural-finance-developing-countries.pdf | Agricultural management |
number of household-level outcomes such as consumption, income, production, food security, and resilience. There is clear evidence that while the take-up for financial products varies, those positively associated with household welfare are provision of agricultural products such as credit, savings (individual versus gr... | agricultural-finance-developing-countries.pdf | Agricultural management |
presented in Table 7.1. Developing countries, excluding Organisation for Economic Co‑operation and Development (OECD) countries, can be grouped into six regions: East Asia and the Pacific (EAP), South Asia (SAR), Europe and 1 MFIs may also include registered rotating savings and credit associations (ROSCAs). 249 How Mo... | agricultural-finance-developing-countries.pdf | Agricultural management |
SSA and SAR have been predominantly agricultural compared to other regions, and this has been the case over the last decade. Table 7.1: Selected Development Indicators Across Regions, Excluding Organisation for Economic Co-operation and Development and High-Income Countries, 2021 EAP ECA LAC MENA SAR SSA GDP (Constan... | agricultural-finance-developing-countries.pdf | Agricultural management |
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