IDEAS home Printed from https://ideas.repec.org/a/taf/ragrxx/v57y2018i2p152-166.html
   My bibliography  Save this article

Impact of access to credit on farm income: policy implications for rural agricultural development in Lesotho

Author

Listed:
  • Abiodun A. Ogundeji
  • Emmanuel Donkor
  • Charmaine Motsoari
  • Stephen Onakuse

Abstract

In this era of rapidly increasing food demand, a sustainable food supply is required to meet such demand. This suggests that capital investment through adequate access to credit is needed to develop the agricultural sector in developing countries including Lesotho. Therefore, this paper examined farmers’ access to credit and its impact on farm income using a three-stage model, namely: Probit, Tobit, and propensity score matching. The study was conducted in Lesotho with a sample size of 100 farmers. The empirical results reveal that access to credit increases net farm revenues by US$116.608 to US$136.894. Furthermore, savings, scale of production, membership of farmer associations and financial record keeping exert significant positive effects on access to credit, while higher interest rates reduce farmers’ likelihood of securing credit from a financial institution. We conclude that adequate access to credit is necessary to promote a sustainable agricultural development and the livelihoods of rural farmers in Africa.

Suggested Citation

  • Abiodun A. Ogundeji & Emmanuel Donkor & Charmaine Motsoari & Stephen Onakuse, 2018. "Impact of access to credit on farm income: policy implications for rural agricultural development in Lesotho," Agrekon, Taylor & Francis Journals, vol. 57(2), pages 152-166, April.
    • Handle: RePEc:taf:ragrxx:v:57:y:2018:i:2:p:152-166
    DOI: 10.1080/03031853.2018.1483251
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/03031853.2018.1483251
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/03031853.2018.1483251?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xiaoshun Qin & Dongdong Jiang & Leon Pretorius, 2021. "The Impact of Financial Factors on the After-Sales Service of Agricultural Machinery: A Case Study of Chinese Agricultural Machinery in South Africa," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 11(1), pages 71-78, March.
    2. Sami Al-Kharusi & Azmat Gani, 2022. "Financial Credit and Expansion of the Non-Hydrocarbon Sector in Gulf Cooperation Council Countries," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 28(3), pages 105-118, November.
    3. Johannes I. F. Henning & Dominique A. Bougard & Henry Jordaan & Nicolette Matthews, 2019. "Factors Affecting Successful Agricultural Loan Applications: The Case of a South African Credit Provider," Agriculture, MDPI, vol. 9(11), pages 1-15, November.
    4. Adriana Appau & Jeffrey Drope & Firman Witoelar & Jenina Joy Chavez & Raphael Lencucha, 2019. "Why Do Farmers Grow Tobacco? A Qualitative Exploration of Farmers Perspectives in Indonesia and Philippines," IJERPH, MDPI, vol. 16(13), pages 1-11, July.
    5. Xinxiang Zhang & Lijun Hu & Manjula Salimath & Ching-Chung Kuo, 2018. "Developing Evaluation Frameworks for Business Models in China’s Rural Markets," Sustainability, MDPI, vol. 11(1), pages 1-28, December.
    6. Merrey, D. J. & Lefore, Nicole, 2018. "Improving the availability and effectiveness of rural and “Micro” finance for small-scale irrigation in Sub-Saharan Africa: a review of lessons learned," IWMI Working Papers H049027, International Water Management Institute.
    7. Ali Sher & Saman Mazhar & Hossein Azadi & Guanghua Lin, 2020. "Smallholder Commercialization and Urban-Rural Linkages: Effect of Interest-Free Agriculture Credit on Market Participation of Rice Growers in Pakistan," Land, MDPI, vol. 10(1), pages 1-24, December.
    8. Sankhulani, Linda, 2021. "Impact evaluation of conservation agriculture on smallholder farmers’ livelihood in Zambia and Tanzania," Research Theses 334762, Collaborative Masters Program in Agricultural and Applied Economics.
    9. Paresh Kumar Sarma & Mohammad Jahangir Alam & Ismat Ara Begum, 2023. "International remittances’ impact on household welfare and food security in Bangladesh: evidence from cross-sectional data," SN Business & Economics, Springer, vol. 3(1), pages 1-17, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:ragrxx:v:57:y:2018:i:2:p:152-166. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/ragr20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.