Determinants of agriculture credit fungibility among smallholder farmers: The case of rural Ghana

Abstract

This study examined the determinants of rural household agriculture credit fungibility (CF). The study found agricultural CF among farmers, with approximately 79% of farmers involved in agricultural CF. Household financial burden was found to be the main cause of CF among the studied farmers. Most fungible credit was used for clothing and food consumption. A probit model was employed to analyze survey data collected from four regions in Ghana. We employed an instrumental variable approach (IV-Probit) to test for robustness due to endogeneity issues. The econometric model results show that the variables of off-farm income and farm size inversely influenced agricultural CF, while those of education, household size, male farmer gender, and chronic disease variables had a positive effect on agricultural CF. Our findings have policy implications for alleviating agricultural CF.

Microcredit and women entrepreneurial success: a moderated mediation effect of household economic status

“…The study discovered that microcredit mainly benefitted borrowers from households with relatively more robust financial conditions than those in deprived and low-income families. In another study in Ghana, Darfor et al (2021) also found that borrowers from households with stable and diversified income sources appeared to make the best use of and benefit from accessing microcredit. However, a few studies have examined the mediating effect of family economic status between microcredit and its assumed outcomes.…”