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Agricultural Microcredit for Tenant Farmers: Evidence from a Field Experiment in Bangladesh

Author

Listed:
  • Marup Hossain
  • Mohammad Abdul Malek
  • Md Amzad Hossain
  • Md Hasib Reza
  • Md Shakil Ahmed

Abstract

We study the impact of an agricultural microcredit program on the livelihoods of small, marginal, and landless tenant farmers in Bangladesh based on a Randomized Control Trial (RCT). Twenty percent of eligible households acquire at least one loan from the program within two years of the start of the intervention. Results show that access to credit has positive but imprecisely estimated effects on adoption of modern varieties (MV) of rice as well as rice yield. The microcredit program increases crop farm income but has no significant effect on total income or expenditure. Although the program does not have a significant effect on most economic outcomes, it demonstrates an increase in farm activities among the targeted farmers. Our study suggests that facilitating access to credit without addressing other constraints may not be enough to increase investment and profits of tenant farmers.

Suggested Citation

  • Marup Hossain & Mohammad Abdul Malek & Md Amzad Hossain & Md Hasib Reza & Md Shakil Ahmed, 2019. "Agricultural Microcredit for Tenant Farmers: Evidence from a Field Experiment in Bangladesh," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(3), pages 692-709.
    • Handle: RePEc:oup:ajagec:v:101:y:2019:i:3:p:692-709.
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    File URL: http://hdl.handle.net/10.1093/ajae/aay070
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    Citations

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    Cited by:

    1. Dao, Thien Ly & Le, Thai-Ha & Tran-Nam , Binh, 2023. "Impacts of Loan Support Policy on Farm Income in Vietnam," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 48(2), pages 53-81, June.
    2. Md. Alamgir Hossain & Mohammad Abdul Malek & Zhengfei Yu, 2023. "Impact of Rural Credit on Household Welfare: Evidence from a Long-Term Panel in Bangladesh," Asian Development Review (ADR), World Scientific Publishing Co. Pte. Ltd., vol. 40(02), pages 363-397, September.
    3. Nusrat Abedin Jimi & Plamen V. Nikolov & Mohammad Abdul Malek & Subal Kumbhakar, 2019. "The effects of access to credit on productivity: separating technological changes from changes in technical efficiency," Journal of Productivity Analysis, Springer, vol. 52(1), pages 37-55, December.
    4. Azad, Abul Kalam & Choudhury, Nayeema Nusrat & Wadood, Syed Naimul, 2022. "Impact of Agricultural Credit on Agricultural Production: Evidence from Bangladesh," MPRA Paper 118990, University Library of Munich, Germany, revised 2021.
    5. Hartarska, Valentina M. & Zhang, Jingfang & Nadolnyak, Denis A., 2023. "Scope Economies from Rural and Urban Microfinance Services," 2023 Annual Meeting, July 23-25, Washington D.C. 335439, Agricultural and Applied Economics Association.
    6. Aminou Arouna & Jeffrey D. Michler & Wilfried G. Yergo & Kazuki Saito, 2021. "One Size Fits All? Experimental Evidence on the Digital Delivery of Personalized Extension Advice in Nigeria," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(2), pages 596-619, March.
    7. Rie Muraoka & Hsiaoping Chien & Minjuan Zhao, 2023. "Production and Market Participation of Buckwheat Farmers: Micro-Evidence from Shaanxi Province, China," Sustainability, MDPI, vol. 15(6), pages 1-17, March.
    8. Nusrat Abedin Jimi & Plamen Nikolov & Mohammad Abdul Malek & Subal Kumbhakar, 2020. "The Effects of Access to Credit on Productivity Among Microenterprises: Separating Technological Changes from Changes in Technical Efficiency," Papers 2006.03650, arXiv.org.
    9. Valentina Hartarska & Jingfang Zhang & Denis A. Nadolnyak, 2023. "Scope economies from rural and urban microfinance services," Southern Economic Journal, John Wiley & Sons, vol. 89(4), pages 1138-1167, April.
    10. Kaat Van Hoyweghen & Goedele Van den Broeck & Miet Maertens, 2020. "Employment Dynamics and Linkages in the Rural Economy: Insights from Senegal," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(3), pages 904-928, September.
    11. Rafael Goldszmidt & Patrick Behr & Cesar Zucco & Anna-Katharina Lenz & Lauro Gonzalez & Martin Valdivia, 2022. "Microcredit Impacts: Evidence from a Large-Scale Observational Study in Brazil," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(4), pages 1940-1966, August.
    12. Nakano, Yuko & Magezi, Eustadius F., 2020. "The impact of microcredit on agricultural technology adoption and productivity: Evidence from randomized control trial in Tanzania," World Development, Elsevier, vol. 133(C).
    13. Barrett, Christopher B. & Islam, Asad & Pakrashi, Debayan & Ruthbah, Ummul, 2021. "Experimental Evidence on Adoption and Impact of the System of rice Intensification," Working Papers 309950, Cornell University, Department of Applied Economics and Management.
    14. Christopher B. Barrett & Asad Islam & Abdul Mohammad Malek & Debayan Pakrashi & Ummul Ruthbah, 2022. "Experimental Evidence on Adoption and Impact of the System of Rice Intensification," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(1), pages 4-32, January.
    15. Eustadius Francis Magezi & Nakano, Yuko, 2020. "The Impact of Microcredit on Household Income: The Case of BRAC in Tanzania," Japanese Journal of Agricultural Economics (formerly Japanese Journal of Rural Economics), Agricultural Economics Society of Japan (AESJ), vol. 22.
    16. Oyakhilomen Oyinbo & Jordan Chamberlin & Tahirou Abdoulaye & Miet Maertens, 2022. "Digital extension, price risk, and farm performance: experimental evidence from Nigeria," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(2), pages 831-852, March.

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