Determinants of Farmers’ Access to Credit in the Lao People’s Democratic Republic

Piya Wongpit () and Keuangkham Sisengnam
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Piya Wongpit: Faculty of Economics and Business Administration National University of Laos, Lao PDR, Postal: Dongdok Campus, Vientiane Capital, Lao PDR
Keuangkham Sisengnam: Faculty of Economics and Business Administration National University of Laos, Lao PDR

Asian Journal of Applied Economics/ Applied Economics Journal, 2022, vol. 29, issue 2, 124-138

Abstract: Access to credit for farmers remains a huge challenge in the Lao PDR. This study aims to identify the determinants of farmers’ access to credit. To achieve this goal, this research uses a data set from a country-wide household survey conducted in 2019. The survey took place in six provinces – Attapue, Champasack, Khammouane, Savannakhet, Vientiane, and Xiengkhuang. The current study applies a Logit model to analyze what factors significantly determine farmers’ access to credit. The result shows that the age of the household head is concavely related to credit access. Household size is negatively correlated with access to credit. Household income is found to have an insignificant impact on demand for credit while household saving does have a significant impact. The area of agricultural land does matter for access to credit because it is commonly used as collateral. The incidence of natural disasters in the last three years significantly determines households’ access to credit.

Keywords: access to credit; natural disaster; collateral; logit model * (search for similar items in EconPapers)
JEL-codes: O13 Q14 R51 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (4)

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