What are the Drivers Influencing Smallholder Farmers Access to Formal Credit System? Empirical Evidence from Bangladesh

Most. Nilufa Khatun ()

Asian Development Policy Review, 2019, vol. 7, issue 3, 162-170

Abstract: The smallholder farmers of Bangladesh are confronting numerous production, marketing and financial limitations, including access to inputs and output markets and new technology. Agricultural credit can play a significant role in overcoming these constraints. However, access to formal agricultural credit by smallholder farmers is still limited. This study employs the Logit model to examine the factors influencing smallholder farmers’ access to formal credit through survey data. Results reveal that more than half of the respondents have no access to formal credit which allows money lenders to function effectively in the rural economy. Econometric analysis shows that household head education level, land size, collateral requirement, lengthy application processes and the non-cooperation of staff in lending institutions are significant factors influencing smallholder farmers’ access to credit. Enabling credit policies along with proper implementation of policies that enable smallholder farmers’ to access credit are important in order to boost agricultural production and living standards.

Keywords: Bangladesh; Smallholder farmers; Access to credit; Determining factors; Agricultural credit; Money lenders. (search for similar items in EconPapers)
Date: 2019
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