The Role of Rural Credit in Agricultural Technology Adoption: The Case of Boro Rice Farming in Bangladesh

Shah Johir Rayhan, Md. Sadique Rahman and Kaiyu Lyu ()
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Shah Johir Rayhan: Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences (CAAS), 12 Zhongguancun South St., Haidian District, Beijing 100081, China
Md. Sadique Rahman: Department of Management and Finance, Sher-e-Bangla Agricultural University, Sher-e-Bangla Nagar, Dhaka 1207, Bangladesh
Kaiyu Lyu: Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences (CAAS), 12 Zhongguancun South St., Haidian District, Beijing 100081, China

Agriculture, 2023, vol. 13, issue 12, 1-17

Abstract: Rice agriculture provides millions of households with a steady source of income and employment. However, for small and marginal farmers, the exorbitant cost of production inputs presents a formidable obstacle in their pursuit of acquiring it. Credit constraints are a significant impediment to the adoption of agricultural technologies. Therefore, this paper identifies the determinant of access to rural credit and its impact on Boro rice production technology adoption in Bangladesh using cross-sectional data. The study employed probit regression, propensity score matching (PSM), inverse probability weighting (IPW), and inverse probability weighted regression adjustment (IPWRA) techniques. The findings indicate that age, family size, working members, and involvement in safety net programs negatively and significantly influence access to rural credit, while earning persons in the family, literacy, rice farming experience, remittance, and total income positively influence access to rural credit. The positive and significant ATT values suggested that access to rural credit has a positive and significant effect on technology adoption and the level of technology use. It was also found that access to rural credit has a heterogeneous effect. In particular, non-government organization (NGO) credit has a more significant impact on technology adoption than formal bank credit. Access to credit and the adoption of agricultural technologies can be greatly improved with the help of a location-specific rural credit policy and strong monitoring from the formal banking sector.

Keywords: rural credit; technology adoption; rice; propensity score matching (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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