Adoption of rural bank credit programs among smallholder farmers in Ghana: an average treatment effect estimation of rates of exposure and adoption and their determinants

Purpose - The study aims to estimate the rates of exposure to, and adoption of, rural bank credit programs by smallholder farmers in rural Ghana and the factors responsible for those rates. Design/methodology/approach - The study used a random sample of 300 smallholder farmers in the Fanteakwa District of Ghana, obtained through the multistage sampling technique. The study also employed the average treatment effects approach to estimate the average treatment effect of farmers’ exposure to rural bank credit programs, on their adoption of such programs. Findings - The actual adoption rate is approximately 41%, and the potential, conditional on the whole population being aware of rural bank credit programs, is approximately 61%. Accordingly, there is a gap of about 20% in the adoption of rural bank credit programs, and is due to the incomplete exposure of smallholder farmers to the rural bank credit programs. Age of the household head, access to extension services, membership in farmer-based organizations and active savings accounts with a rural bank are the major contributors to smallholder farmer exposure to and the adoption of rural bank credit programs. Originality/value - The current study is the first of its kind to be conducted in Ghana on rural bank credit programs. It takes into account the extent to which smallholder farmers are exposed to such credit programs and how it influences their decisions to access or adopt.