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Micro-lending for small farmers in Bangladesh

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  • Rashid, Shahidur
  • Sharma, Manohar
  • Zeller, Manfred

Abstract

It has been long hypothesized that lack of access to credit is the main reason why, despite higher profitability of High Yielding Varieties (HYVs), farmers in developing countries continue to allocate a portion of their land to traditional crop varieties. The empirical testing of this hypothesis has generated a large body of literature with differing conclusions. This paper re-examines the issue in the context of a specially designed group-based lending program for small farmers in Bangladesh, who neither have access to formal sources of credit nor do they qualify to become members of other micro-credit organizations. Two measures of access to credit, credit limit and amount borrowed at a given point in time, are used to analyze the determinants of farm households' land allocation decision. Under a variety of model specifications, formulated within Heckman's two-step method, the results show that credit limits from the lending programs and informal sources are significant determinants of small farmers' decision to cultivate HYV. Authors' abstract.

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series MSSD discussion papers with number 45.

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Date of creation: 2002
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Handle: RePEc:fpr:mssddp:45

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Keywords: Bangladesh. ; Microfinance. ; South Asia. ; Credit Bangladesh. ; Small farmers. ; Land use Economic aspects. ; Households Bangladesh. ; Micro-credit programs. ; Selection bias. ; Access to credit. ; Credit limit. ; Land allocation decision. ;

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References

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  1. Delgado, Christopher L. & Rosegrant, Mark W. & Steinfeld, Henning & Ehui, Simeon K. & Courbois, Claude, 1999. "The growing place of livestock products in world food in the twenty-first century," MTID discussion papers 28, International Food Policy Research Institute (IFPRI).
  2. Rashid, Shahidur, 2002. "Dynamics of agricultural wage and rice price in Bangladesh," MSSD discussion papers 44, International Food Policy Research Institute (IFPRI).
  3. Minot, Nicholas & Baulch, Bob, 2002. "The spatial distribution of poverty in Vietnam and the potential for targeting," MSSD discussion papers 42, International Food Policy Research Institute (IFPRI).
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  28. repec:fth:oxesaf:99-25 is not listed on IDEAS
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Citations

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Cited by:
  1. Shahidur Rashid, 2004. "Spatial Integration of Maize Markets in Post-liberalised Uganda," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 13(1), pages 102-133, March.
  2. Dorosh, Paul A. & Shahabuddin, Quazi, 2002. "Rice price stabilization in Bangladesh," MTID discussion papers 46, International Food Policy Research Institute (IFPRI).
  3. Gulati, Ashok & Narayanan, Sudha, 2002. "Rice trade liberalization and poverty," MSSD discussion papers 51, International Food Policy Research Institute (IFPRI).
  4. Shahabuddin, Quazi & Dorosh, Paul A., 2002. "Comparative advantage in Bangladesh crop production," MTID discussion papers 47, International Food Policy Research Institute (IFPRI).
  5. Delgado, Christopher L. & Rosegrant, Mark W. & Wada, Nikolas & Meijer, Siet & Ahmed, Mahfuzuddin, 2002. "Fish as food," MSSD discussion papers 52, International Food Policy Research Institute (IFPRI).
    • Delgado, Christopher L. & Rosegrant, Mark W. & Wada, Nikolas & Meijer, Siet & Ahmed, Mahfuzuddin, 2002. "Fish as food," MTID discussion papers 52, International Food Policy Research Institute (IFPRI).
  6. Minot, Nicholas & Daniels, Lisa, 2002. "Impact of global cotton markets on rural poverty in Benin," MTID discussion papers 48, International Food Policy Research Institute (IFPRI).

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