The impact of microfinance services on the efficiency of family farms in Sub-Saharan Africa: the case of Cameroon

Alim Belek and Abega Ngono Jean Marie

Agricultural Finance Review, 2020, vol. 81, issue 1, 21-38

Abstract: Purpose - Does MFIs agricultural credit influence the determinants of the efficiency of SFF which are socio-economic factors of the farmers but also agricultural endowments of family farms? This paper aims to study the contribution of MFI services on improving the technical efficiency of SFFs in Cameroon. Design/methodology/approach - The stochastic frontier analysis (SFA) model permits the estimation of the technical efficiency indicators for beneficiaries and nonbeneficiaries of agricultural credits on a sample of 130 cocoa farming households and four MFIs of the same area between 2008 and 2011. The censored tobit model is used to assess the determinants of technical efficiency. Findings - The results show that the SFF beneficiaries of agricultural credit have an average technical efficiency of 0.68 inferior to that of nonbeneficiaries (0.72) as expected. They are, respectively, at 0.32 and 0.28 of their full productive capacities. The results of the censored Tobit model show that socioeconomic characteristics of the producer such as age and gender explain negatively, while experience explains positively the technical efficiency of SFFs. Research limitations/implications - Although without any selectivity bias, this study indicates the essential character of the socioeconomic factors in the amplification of the role of the MFIs credit on the efficiency of SFFs. Practical implications - Strategies to improve the efficiency of SFFs require an increase in MFI credits, primarily targeting young, experienced and female farmers. Originality/value - This study examines the efficiency of SFFs by highlighting the interaction between the socio-economic factors of farmers and the credit of MFIs. It also points to the problem of monitoring the implementation of agricultural financing.

Keywords: Stochastic frontier analysis; Agricultural efficiency; Censored tobit; Family farms; MFI services (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:afrpps:afr-02-2019-0021

DOI: 10.1108/AFR-02-2019-0021

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