Sustaining Performance of Wheat–Rice Farms in Pakistan: The Effects of Financial Literacy and Financial Inclusion

Ali Raza, Guangji Tong (), Vasilii Erokhin, Alexey Bobryshev, Lyubov Chaykovskaya and Natalya Malinovskaya
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Ali Raza: College of Economics and Management, Northeast Forestry University, Harbin 150040, China
Guangji Tong: College of Economics and Management, Northeast Forestry University, Harbin 150040, China
Vasilii Erokhin: School of Economics and Management, Harbin Engineering University, Harbin 150001, China
Alexey Bobryshev: Faculty of Accounting and Finance, Stavropol State Agrarian University, Stavropol 355017, Russia
Lyubov Chaykovskaya: Higher School of Economics and Business, Plekhanov Russian University of Economics, Moscow 117997, Russia
Natalya Malinovskaya: Department of Audit and Corporate Reporting, Financial University under the Government of the Russian Federation, Moscow 125167, Russia

Sustainability, 2023, vol. 15, issue 9, 1-19

Abstract: The unceasingly augmenting emission of greenhouse gases (GHG) has contributed substantially to the degradation of the key environmental parameters and the deterioration of performance of the agricultural sector globally. The food insecurity problem has been aggravated consequently. Due to a variety of economic and social issues, many farmers in developing economies use low-efficient and environmentally unfriendly agricultural practices. Adopting innovative technologies and practices linked with sustainable farming remains a complex issue across the developing world. In particular, financial exclusion and low financial literacy are commonly cited as the critical obstacles to achieving sustainable development. To contribute to resolving this development problem, the study attempts to investigate the effects of financial inclusion and literacy on establishing a sustainable performance of farms. A structured questionnaire was used to collect the data from 220 farmers within the Central Punjab region of Pakistan. Small-scale farms demonstrated a potential to sustain their performance by improving financial inclusion and financial literacy. Trust in extension services for agriculture plays a significant role in moderating the impact of eight independent variables (knowledge, skills, attitude, behavior, access, usage, quantity, welfare) on sustainable farm performance. The study implies that increased trust in financial services is essential for improving sustainable performance in the agricultural sector. The effect imposed by financial actors is crucial for establishing trust in financial services linked to sustainability within the agricultural industry.

Keywords: financial institutions; credit; extension services; financial inclusion; sustainable agriculture; financial literacy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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