Factors Determining Farmers’ Access to and Sources of Credit: Evidence from the Rain-Fed Zone of Pakistan

Ayat Ullah, Nasir Mahmood, Alam Zeb and Harald Kächele
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Ayat Ullah: Research Area 2 “Land Use and Governance”, Working Group: Sustainable Land Use in Developing Countries, Leibniz Centre for Agricultural Landscape Research (ZALF), Eberswalder Straße 84, 15374 Müncheberg, Germany
Nasir Mahmood: Research Area 2 “Land Use and Governance”, Working Group: Sustainable Land Use in Developing Countries, Leibniz Centre for Agricultural Landscape Research (ZALF), Eberswalder Straße 84, 15374 Müncheberg, Germany
Alam Zeb: Department of Renewable Resources, University of Alberta, 751 General Services Building, Edmonton, AB T6G 2H1, Canada
Harald Kächele: Research Area 2 “Land Use and Governance”, Working Group: Sustainable Land Use in Developing Countries, Leibniz Centre for Agricultural Landscape Research (ZALF), Eberswalder Straße 84, 15374 Müncheberg, Germany

Agriculture, 2020, vol. 10, issue 12, 1-13

Abstract: This study investigates the factors that affect farmers’ access to agricultural credit and its role in adopting improved agricultural technologies in the rain-fed zone of Khyber Pakhtunkhwa (KP), Pakistan. Using logistic models, we assess and compare the relative role of farmers’ socioeconomic attributes in their access to credit and adoption strategies. The results indicate a moderate positive association between farmers’ access to agricultural credit and their adoption of improved agricultural technologies. The binary logit model’s results indicate that farmers with a large-sized farm, high farm income, better access to information, and large physical asset ownership showed a positive influence on credit access. However, farming experience showed a negative effect on farmers’ access to agricultural credit. Regarding farmers’ credit sources, this study found that asset-rich farmers with more farming experience and better access to information relied more on banks than on input providers and informal credit sources. Similarly, older farmers with more education, larger farm sizes and high farm income were more likely to have borrowed from input providers than banks. We conclude that the role of the effective provision of information on credit and agricultural technology is imperative and requires separate policies that are specifically aimed at different groups of farmers with different socioeconomic and farm-related characteristics.

Keywords: agricultural credit; adoption of agricultural technologies; rain-fed zone; Khyber Pakhtunkhwa; socioeconomic attributes (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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