Purpose- Access to suitable production means is required for producers to improve their profitability. As a result, agricultural financing appears to be a critical tool for attaining this goal. Various programs and donors have been attempting for decades to put together initiatives that would make it easier for the most disadvantaged populations, including the primarily agricultural rural world, to access sources of financing. Due to poor performance, the majority of these programs have failed. This study aims to investigate the determinants of credit access and how loans affect rice farm profitability. Methodology - Data for this study were collected from 102 producers living in the two biggest paddy production zones in southern Togo. The treatment effect model was used to examine the data collected through the survey investigation. Findings- Gender, asset type, producer experience, access to credit information, primary occupation, and land ownership status of the producer are all factors in determining rice growers' access to credit. Gender, producer experience, access to credit information, and land ownership status all have a beneficial impact on credit availability. However, asset type and the producer's main occupation have a negative impact. It also demonstrates that whether rice farms have access to loans has little bearing on their profitability. On the other hand, the average treatment impact of credit access is statistically significant. It also shows that the farmer's degree of education, expertise in the field, and lastly, the size of rice field farmed are the most important elements affecting the profitability of rice fields. Conclusion- The findings have policy implications, increasing the channels for disseminating credible information about funding sources, access procedures and the institutions in charge of these funding sources. Integrating the enhancement of farmers' educational levels into rural support initiatives, and the extension of major agricultural landscaping works undertaken by the government to other areas suitable for rice cultivation. Keywords: Agricultural credit, rice production, Probit-2SLS model, Togo. JEL Codes: C26, D14, Q14
Purpose - This article investigates the factors influencing the financial performance and the level of financial sustainability of microfinance institutions (MFIs) in Togo. Methodology - Ordinary least squares models and binary probit models were employed in the research to identify the determinants of return on assets as a proxy for the financial performance and operational and financial sustainability of microfinance institutions. Unbalanced panel data collected from the MIX Market database of 29 MFIs in Togo over the period 1999–2018 was used in the study Findings – The results show that MFI's financial performance is positively and statistically influenced by size. However, the number of depositors per borrower and the loan loss ratio is negatively linked to financial performance. The operational sustainability was positively related to the depositors per borrower ratio, the PAR > 30 (Portfolio at Risk 30 days), and the productivity ratio. On the other hand, it is negatively related to PAR > 90 and the ratio of personal expenses to outstanding credit. Finally, financial sustainability was significantly and positively influenced by the size, and it was significantly and negatively influenced by PAR > 90. Conclusions – Taking these results into account can allow microfinance actors in Togo as well as politicians and donors to better orient their actions in the sector.
The problem of underfinancing in the agricultural sector has always been a subject of consideration for governments. Thus, for decades, programs have been implemented to eradicate poverty and facilitate access to financial services for the most disadvantaged segments of the population, represented mainly by the rural population. Among these programs, microfinance holds a predominant place. However, the latter is increasingly moving away from the agricultural sector, depending on its assessment of the risky nature of agricultural investments. This study sought to analyze the effect of agricultural credit supply on the performance of microfinance institutions (MFIs). Data from the two largest microfinance institutions (FUCEC-Togo and WAGES) were analyzed. The linear regression model was used for the analysis. The results show that the supply of agricultural credit has a negative impact on financial performance ratios of both MFIs in this study. The study recommended that microfinance institutions improve their agricultural financial services to adapt them to the needs of rural populations. The introduction of financial products should be adapted to the needs of producers and compatible with the profits of microfinance structures.
Purpose: The agricultural sector in Togo has a huge financing problem and numerous other problems mainly related to climate change.Methodology: This study proposes a critical look at the microfinance sector and its relationship with the agricultural industry, which banking institutions have long abandoned.Results/Findings: Based on data from major international institutions and the two most significant microfinance structures in the country, after some analysis, the results show that the microfinance sector in Togo is a very dynamic sector with strong growth, given its aggregates that continue to grow year after year. On the other hand, the share of agricultural credit in the portfolio of microfinance structures is constantly decreasing from year to year, demonstrating that microfinance is also starting to move away from the farming sector. Finally, the credits granted are not, for the most part, adapted to the financial needs of agricultural producers. Most of the time, these rural loans are insufficient or do not respect the cultivation calendars of producers. Also, access to these loans is prohibitive for many producers, primarily small-scale producers.
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