What Influences Rice Farmers’ Choices of Credit Sources in Côte d’Ivoire? An Econometric Analysis using the Multinomial Conditional Logit Model

N’Banan Ouattara, Xueping Xiong, Moussa Bakayoko, Trazié Bertrand Athanase Youan Bi, Dessalegn Anshiso Sedebo and Zié Ballo
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N’Banan Ouattara: College of Economics and Management, Huazhong Agricultural University, Wuhan, China Centre Suisse de Recherches Scientifiques en Côte d’Ivoire, Abidjan, Côte d’Ivoire
Xueping Xiong: College of Economics and Management, Huazhong Agricultural University, Wuhan, China
Moussa Bakayoko: Agence pour le Développement de la Filière Riz (ADERIZ), Abidjan, Côte d’Ivoire
Trazié Bertrand Athanase Youan Bi: Centre Suisse de Recherches Scientifiques en Côte d’Ivoire, Abidjan, Côte D’Ivoire UFR Sciences Économiques et Développement, Université Alassane Ouattara, Bouaké, Côte d’Ivoire
Dessalegn Anshiso Sedebo: College of Economics and Management, Huazhong Agricultural University, Wuhan, China
Zié Ballo: UFR Sciences Économiques et Gestion, Université Félix Houphouët-Boigny, Abidjan, Côte d’Ivoire

Progress in Development Studies, 2022, vol. 22, issue 2, 149-173

Abstract: In Côte d’Ivoire, the low participation of smallholder farmers in the credit market remains a matter of concern. This study examines the key determinants of rice farmers’ participation in the credit market. We use a Multinomial Conditional Logit model to consider the characteristics related to the use of different credit sources. A total of 588 rice farmers were randomly sampled from seven rice areas. Our findings reveal that gender, age, education level, experience in rice farming, rice plot size, lowland rice farming, extension contact, membership of a farmer-based organization, marketing of paddy rice, and off-farm income significantly influence the use of different credit sources. While credit requirements such as saving plus collateral, kinship/friendship, membership, favoured client, loan maturity, and the distance between borrowers and lenders are credit source-specific variables that significantly determine rice farmers’ choices between different credit sources. These empirical results show that in addition to farmer-specific variables, policymakers should consider the characteristics of credit sources for developing a credit market suitable for smallholder farmers.

Keywords: Agricultural credit; asymmetric information; contract enforcement; Côte d’Ivoire; social relationship; transaction costs (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:sae:prodev:v:22:y:2022:i:2:p:149-173

DOI: 10.1177/14649934211066453

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