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Determinants of Credit Constraint Among Corn Farmers in Isabela Province, Philippines


  • Bathan, Bates M.
  • Gordoncillo, Prudenciano U.


The study describes how the demand and preference for agricultural credit is satisfied or not among corn farmers in Isabela, Philippines. It also categorizes farmers as credit unconstrained, quantity rationed, transaction cost rationed or risk rationed individuals, and determines the factors affecting credit constraint. A total of 76 credit unconstrained and 76 credit constrained corn farmers were selected using stratified random sampling. Using probit regression analysis, the significant determinants of credit constraint are age, sex, and monthly household income. Results show that corn farmers who are older, male, or have higher income are less likely to become credit constrained. The main reason cited for being credit constrained in the formal sector is the lack of collateral while for the informal sector, the reason cited is loan application being partially approved.

Suggested Citation

  • Bathan, Bates M. & Gordoncillo, Prudenciano U., 2017. "Determinants of Credit Constraint Among Corn Farmers in Isabela Province, Philippines," Journal of Economics, Management & Agricultural Development, Journal of Economics, Management & Agricultural Development (JEMAD), vol. 3(2), December.
  • Handle: RePEc:ags:pjemad:309412
    DOI: 10.22004/ag.econ.309412

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    References listed on IDEAS

    1. Ali, Daniel Ayalew & Deininger, Klaus & Duponchel, Marguerite, 2014. "Credit constraints, agricultural productivity, and rural nonfarm participation : evidence from Rwanda," Policy Research Working Paper Series 6769, The World Bank.
    2. Daniel Ayalew Ali & Klaus Deininger & Marguerite Duponchel, 2014. "Credit Constraints and Agricultural Productivity: Evidence from rural Rwanda," Journal of Development Studies, Taylor & Francis Journals, vol. 50(5), pages 649-665, May.
    3. Stefan Dercon & Pramila Krishnan, 1996. "Income portfolios in rural Ethiopia and Tanzania: Choices and constraints," Journal of Development Studies, Taylor & Francis Journals, vol. 32(6), pages 850-875.
    4. Gerpacio, Roberta V. & Labios, Jocelyn D. & Labios, Romeo V. & Diangkinay, Emma I., 2004. "Maize in the Philippines: Production Systems, Constraints, and Research Priorities," Maize Production Systems Papers 7650, CIMMYT: International Maize and Wheat Improvement Center.
    5. Franklin Simtowe & Manfred Zeller & Aliou Diagne, 2009. "The impact of credit constraints on the adoption of hybrid maize in Malawi," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 90(1), pages 5-22.
    6. Boucher, Stephen R. & Guirkinger, Catherine & Trivelli, Carolina, 2006. "Direct Elicitation of Credit Constraints: Conceptual and Practical Issues with an Empirical Application to Peruvian Agriculture," Working Papers 6883, University of California, Davis, Department of Agricultural and Resource Economics.
    7. Domingo, Sonny N. & Reyes, Celia M., 2009. "Crop Insurance: Security for Farmers and Agricultural Stakeholders in the Face of Seasonal Climate Variability," Discussion Papers DP 2009-12, Philippine Institute for Development Studies.
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