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Household-level Credit Constraints in Urban Ethiopia

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Author Info
Gamal Ibrahim ()
Abbi Kedir
Sebastian Torres
Abstract

Empirical evidence on determinants of credit constraints and the amount borrowed by urban household in Sub-Saharan Africa is almost non-existent. Using an extended direct approach by virtue of the unique data set we have (the Fourth Round Ethiopian Urban Household Survey), we analysed the determinants of credit constraints and the amount borrowed by urban households. We find a high percentage of credit-constrained households, the majority of which constitute discouraged borrowers. Discrete choice models that control for potential endogeneity and selectivity bias have been fitted to our data. Our analysis shows current household resources, number of dependants, and location as significant correlates.

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Paper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 07/03.

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Date of creation: Mar 2007
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Handle: RePEc:lec:leecon:07/3

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Related research
Keywords: credit constrained households credit rationing endogeneity instrumental variables urban Ethiopia Africa

Find related papers by JEL classification:
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
O55 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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