Financial Literacy and Credit Accessibility of Rice Farmers in Pakistan: Analysis for Central Punjab and Khyber Pakhtunkhwa Regions

Ali Raza, Guangji Tong (), Furqan Sikandar, Vasilii Erokhin and Zhang Tong
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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
Furqan Sikandar: College of Economics and Management, Northeast Forestry University, Harbin 150040, China
Vasilii Erokhin: School of Economics and Management, Harbin Engineering University, Harbin 150001, China
Zhang Tong: Department of History, Northeastern University at Qinhuangdao, Qinhuangdao 066004, China

Sustainability, 2023, vol. 15, issue 4, 1-24

Abstract: This study investigates the factors that affect farmers’ access to Food Security and Agricultural Credit (FSAC) services for the farmers of Pakistan who have no access to banking but have a feasible farm business. Using multiple regressions and logistic analysis, the authors revealed the determinants of farmers’ financial literacy and analyzed the variables which affected the farmers’ accessibility to FSAC. Results indicated that the average financial literacy of respondents was at a moderate level. It was affected by the age of respondents, length of their education, distance to nearby cities, ownership of bank accounts, annual income, and financial education experience. The FSAC accessibility was also impacted by the area of cultivated land, interest rate, collateral, farms’ income, financial literacy index, credit accessibility experiences, the legal status of farmer groups, and the amount of a loan. Some of the issues that prevent farmers from having widespread access to the FSAC include the lack of loan need, lack of FSAC awareness, lack of collateral, loan usury perspective, loan rejection experience, fear of borrowing from the bank, and inactive farmer groups. The study contributes to the existing literature on the determinants of farmers’ access and choice of credit sources by using a primary data set.

Keywords: agriculture; agronomy; Pakistani farmers; financial literacy; credit accessibility (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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