Does experience with agricultural loans improve farmers' well-being? Evidence from Benin

Nicaise Sheila M. Sagbo and Yoko Kusunose

Agricultural Finance Review, 2020, vol. 81, issue 4, 503-519

Abstract: Purpose - The purpose of this study is to examine the effect of loans provided by Benin's largest microlender. Design/methodology/approach - A pipeline design and matching techniques contribute for identifying the causal effect. The loan treatment considered is loan experience. It includes program entry timing, take-up frequency and the amount obtained over six years. The study uses a cluster analysis to create comparison groups. Findings - Experience with agricultural loans has a statistically significantly positive effect on recipients' farm income, food security and women's empowerment. Though unusual, these positive results can be credited to the very low rate of loan repurposing and mostly to the lender's rigorous loan implementation strategy. Practical implications - The study results validate the hypothesis underlying development strategies that target women regarding loan programs. The study provides a simple yet valuable lesson for future credit impact evaluations: the context of the loan program as well as the evaluation indicators is essential. Social implications - This study’s findings suggest that microcredit, when offered judiciously and with support, can improve farmers' conditions. Originality/value - Given the relatively long period studied, the analysis has been innovative in defining loan treatment and creating reliable treatment groups. Also to the best of the authors’ knowledge, this study is the first of its kind in Benin.

Keywords: Agricultural credit; Microcredit; Pipeline design; Propensity score matching (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:afrpps:afr-06-2020-0082

DOI: 10.1108/AFR-06-2020-0082

Access Statistics for this article

Agricultural Finance Review is currently edited by Valentina Hartarska and Denis Nadolnyak

More articles in Agricultural Finance Review from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().