What Determines Household Participation in Credit Markets in Malawi?

Wytone Jombo and Wook Sohn ()
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Wook Sohn: KDI School of Public Policy and Management, South Korea

The African Finance Journal, 2024, vol. 26, issue 2, 27-42

Abstract: This study investigates the determinants of household participation in Malawi's credit markets using merged comprehensive data from the Integrated Household Survey. We find that larger family sizes increase the probability of households' accessing credit from village banks, and that higher educational levels and residing in urban areas reduce the probability that households utilize unchartered sources. In addition, women are more likely to borrow from village banks, while men are more likely to borrow from loan sharks, relatives, and neighbors. Because access to credit has welfare-enhancing effects, it is plausible to have policies that encourage penetration of rural areas.

Keywords: Financial Inclusion; Informal Credit; Village Banks in Malawi; Determinants of Credit Participation (search for similar items in EconPapers)
JEL-codes: O16 O17 O18 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:afj:journl:v:26:y:2024:i:2:p:27-42

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