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Poverty Status and the Impact of Formal Credit on Technology Use and Wellbeing among Ethiopian Smallholders


  • Liverpool, Lenis Saweda O.
  • Winter-Nelson, Alex


Summary This paper examines the impact of formal credit (largely microfinance) on the use of improved technology and on consumption and asset growth across households in different degrees of asset poverty. Using data from rural Ethiopia, the analysis finds no relationship between participation in microfinance programs and the use of technologies or consumption growth among the poorest households even though the use of certain technologies, like fertilizer, contributes to their asset accumulation over time. For other households, microfinance has positive effects on both consumption and asset growth as well as on the use of improved technology. The findings imply variation in constraints faced by different classes of poor households and suggest the value of asset-based poverty classifications in identifying target groups for poverty interventions.

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  • Liverpool, Lenis Saweda O. & Winter-Nelson, Alex, 2010. "Poverty Status and the Impact of Formal Credit on Technology Use and Wellbeing among Ethiopian Smallholders," World Development, Elsevier, vol. 38(4), pages 541-554, April.
  • Handle: RePEc:eee:wdevel:v:38:y:2010:i:4:p:541-554

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    References listed on IDEAS

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    Cited by:

    1. Jing You & Samuel Annim, 2014. "The Impact of Microcredit on Child Education: Quasi-experimental Evidence from Rural China," Journal of Development Studies, Taylor & Francis Journals, vol. 50(7), pages 926-948, July.
    2. Liverpool-Tasie, Lenis Saweda, 2012. "Targeted Subsidies and Private Market Participation: An Assessment of Fertilizer Demand in Nigeria:," IFPRI discussion papers 1194, International Food Policy Research Institute (IFPRI).
    3. Lambrecht, Isabel & Vanlauwe, Bernard & Merckx, Roel & Maertens, Miet, 2014. "Understanding the Process of Agricultural Technology Adoption: Mineral Fertilizer in Eastern DR Congo," World Development, Elsevier, vol. 59(C), pages 132-146.
    4. Liverpool-Tasie, Lenis Saweda O. & Winter-Nelson, Alex, 2009. "Poverty status and the impact of social networks on smallholder technology adoption in rural Ethiopia," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49357, Agricultural and Applied Economics Association.
    5. Mathilde Maîtrot & Miguel Niño-Zarazúa, 2017. "Poverty and wellbeing impacts of microfinance: What do we know?," WIDER Working Paper Series 190, World Institute for Development Economic Research (UNU-WIDER).
    6. Coromaldi, Manuela & Pallante, Giacomo & Savastano, Sara, 2015. "Adoption of modern varieties, farmers' welfare and crop biodiversity: Evidence from Uganda," Ecological Economics, Elsevier, vol. 119(C), pages 346-358.
    7. Gashaw Tadesse Abate & Carlo Borzaga & Kindie Getnet, 2013. "Financial sustainability and outreach of microfinance institutions in Ethiopia: does organizational form matter?," Euricse Working Papers 1356, Euricse (European Research Institute on Cooperative and Social Enterprises).
    8. You, Jing, 2014. "Risk, under-investment in agricultural assets and dynamic asset poverty in rural China," China Economic Review, Elsevier, vol. 29(C), pages 27-45.
    9. Akotey, Joseph Oscar & Adjasi, Charles K.D., 2016. "Does Microcredit Increase Household Welfare in the Absence of Microinsurance?," World Development, Elsevier, vol. 77(C), pages 380-394.
    10. Goodman, Rachael, 2017. "Borrowing Money, Exchanging Relationships: Making Microfinance Fit into Local Lives in Kumaon, India," World Development, Elsevier, vol. 93(C), pages 362-373.


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