Flexible loans and access to agricultural credit for smallholder farmers in Kenya

Odhiambo, Fredrick Onyango; Upadhyaya, Radha

doi:10.1108/afr-05-2020-0072

Cited by 5 publications

(4 citation statements)

References 24 publications

(64 reference statements)

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“…The study by Ahmed et al (2000), for example, highlights that changes in management technologies have a direct impact on household income patterns of food and non-food expenditure and caloric intake of the families involved. However, the utilization of appropriate strategies and techniques is constrained by the limited availability of financing (Odhiambo and Upadhyaya, 2020). While limited literature exists on the ways in which flexibility can improve access to financing, it does not highlight how the financing facility can be structured around traditional and prevalent practices that are widely accepted and would therefore be easier to emulate by means of simple formalization.…”

Section: The Financial Viability Of Adhyaramentioning

confidence: 99%

Assessing the financial sustainability of a rural livestock practice: a case of Pakistan

Lakhani

Tauseef²,

Chattha³

2022

AFR

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PurposeThis research aims to investigate the feasibility of formalizing an old, informal livestock financing practice in Pakistan known as Adhyara through assessment of estimated return and risk.Design/methodology/approachThe hedonic pricing model was employed to estimate the impact of breed, weight, pregnancy status and milk yield on cattle sales price, and appropriate estimates were used for monetization. The stochastic simulation was then used to estimate the distribution of capital returns for investors in the informal livestock practice. Primary data on animal prices and attributes were obtained from a survey of dairy farms and data on terms of Adhyara deal were obtained from a survey of nomad pastoralists and current investors. In-depth interviews were also conducted with different stakeholders to get insights into this informal livestock practice and social elements.FindingsResults from the hedonic model show that the animal prices in Pakistan are highly variable depending on the animal attributes of breed, weight, milk yield and pregnancy status with an average value of PKR (Pakistani Rupee) 191,771 and standard deviation of PKR 66,762. Our stochastic simulation reveals mean estimated real return of 24 per cent. This return is competitive considering local and international investment alternatives.Social implicationsThe research identifies a lucrative and market competitive investment option and thus opens the window of opportunity to introduce grass root entrepreneurship in the livestock sector. Recommended formalization of this traditional livestock practice can boost investment creating substantial potential for the uplift of local communities and simultaneously contribute towards the goals of poverty eradication, food provision and employment generation for women.Originality/valueThis research lays out the possibility of formalizing the practice of a traditional livestock financing in an agricultural country.

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Section: The Financial Viability Of Adhyaramentioning

confidence: 99%

Assessing the financial sustainability of a rural livestock practice: a case of Pakistan

Lakhani

Tauseef²,

Chattha³

2022

AFR

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“…Ullah et al [13,14] reported that access to agricultural loans from banks enabled smallholder farmers to adopt and use novel agricultural technologies in farming. Odhiambo [6] also found that farmers who got flexible loans from government agencies were able to buy and use improved inputs such as seeds, fertilizers, and pesticides.…”

Section: Sources Of Agricultural Credit and Correlationmentioning

confidence: 99%

“…The results supported the findings of Zulfiqar [27] that the rate of the farmers' access to agricultural credit is low. However, it opposed Odhiambo [6] that a larger percentage of smallholder farmers are increasingly accessing agricultural loans.…”

Section: Level Of Access To Agricultural Creditmentioning

confidence: 99%

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Access to Credit and Its Relationship with Information and Communication Technology Tools’ Adoption in Agricultural Extension among Peasants in Rangwe Sub-County, Kenya

Dimo

Maina

Ndiema

2022

AJAEES

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Access to agricultural credit is one of the key factors that boost the adoption of technologies to improve agricultural production. Information and Communication Technology (ICT) tools have been referred to as essential channels in the dissemination of agricultural extension information. However, it has been observed that the majority of peasants were not using them to access the information. The aim of this study was to delineate the level of agricultural credit access, sources of the credit, amount of the credit accessed, and the correlation between access to the credit and the use of ICT tools in the extension services among peasants. A correlation research design was utilized in this study at Rangwe Sub-County, Kenya. Data were collected with the help of pretested structured questionnaire from 106 peasants who grow cassava in the Sub-County. The data obtained were analyzed using Spearman’s correlation and descriptive statistics with the aid of Statistical Package for Social Science (SPSS) Version 25. Descriptive results revealed that 68% of the peasants interviewed had no access to the credit, while 32% had access. The majority (70%) of those who had the access received it from Saving and Credit Co-Operative (SACCOs). The majority (68%) received the lowest amount of credit. Spearman’s correlation revealed that there was a moderate, positive correlation between access to credit and the use of the ICT tools. The correlation was statistically significant at 1% level of significance (R = +.646**, P = .000, R2 =0.417). Access to credit appears to provide a positive and moderate correlation with the use of the ICT tools as it predicts 42% of the use of the tools in cassava production. The positive correlation coefficient indicates that an increase in access to agricultural credits among the peasants translates to an increase in the adoption of ICT tools in agricultural extension.

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Farmers’ preference for digital credit: Does the delivery channel matter?

Sarfo

Mußhoff

Weber

et al. 2023

Q Open

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Previous studies highlight the limited credit access for farmers compared to non-agricultural firms in Sub-Saharan Africa. A new innovation which has the potential to serve the financing needs of farmers in Sub-Saharan Africa is digital credit. However, empirical studies on farmers’ preferences for digital credit is limited. Formal financial institutions and mobile network operators are two different delivery channels for digital credit with different loan characteristics. We apply a discrete choice experiment to investigate smallholder farmers’ preferences for digital credit in Madagascar. Our results show that digital credit is more attractive for farmers if it offers a lower interest rate per month, longer loan duration, and flexible repayment conditions adapted to farmers’ production needs. Our results highlight the potential of digital credit for rural farmers if mobile network operators could provide digital credit with longer loan maturities and formal financial institutions could offer digital credit with more flexible repayment conditions.

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Flexible loans and access to agricultural credit for smallholder farmers in Kenya

Cited by 5 publications

References 24 publications

Assessing the financial sustainability of a rural livestock practice: a case of Pakistan

Assessing the financial sustainability of a rural livestock practice: a case of Pakistan

Access to Credit and Its Relationship with Information and Communication Technology Tools’ Adoption in Agricultural Extension among Peasants in Rangwe Sub-County, Kenya

Farmers’ preference for digital credit: Does the delivery channel matter?

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