IDEAS home Printed from https://ideas.repec.org/a/gam/jlands/v12y2023i5p1055-d1145237.html
   My bibliography  Save this article

The Effect of Policy and Technological Innovations of Land Tenure on Small Landholders’ Credit-Worthiness: Evidence from Ethiopia

Author

Listed:
  • Shewakena Aytenfisu Abab

    (Center for Environment and Development, College of Development Studies, Addis Ababa University, Addis Ababa P.O. Box 1176, Ethiopia)

  • Feyera Senbeta

    (Department of Biological Sciences, Faculty of Sciences, Botswana University of Agriculture and Natural Resources, Gaborone 0027, Botswana)

  • Tamirat Tefera Negash

    (Center for Environment and Development, College of Development Studies, Addis Ababa University, Addis Ababa P.O. Box 1176, Ethiopia)

Abstract

Since the early 2000s, Ethiopia has been implementing one of the largest land certification and digitalization programs in Africa, underpinned by technological and policy innovations. The reform indicates a promising avenue for increasing the collateralization of land use rights for smallholder households who have been credit constrained. However, there is scant evidence to what extent these reforms have influenced access to credit. To help generate new insights and fill this gap, the study employed administrative data generated from 11 districts’ digital land registers, survey data from 2296 households in 19 districts, key informant interviews, and policy and legal framework review. Descriptive and inferential statistics complemented by qualitative explanations are employed to analyze the results of the study. The results revealed that accessibility of information from the digital rural land registers increased the credit-worthiness of small landholders and reduced transaction costs and risks. The reform related to collateralization of land use rights also incentivizes financial institutions to establish new loan products for small landholders. The study concludes that while the two-stage land certification programs allow smallholders to possess documented land rights, their credit-worthiness may likely remain negligible without further technological and policy innovations. This implies two policy issues: the need to reform secured transaction laws and digitalizing registries for higher land rights trade ability.

Suggested Citation

  • Shewakena Aytenfisu Abab & Feyera Senbeta & Tamirat Tefera Negash, 2023. "The Effect of Policy and Technological Innovations of Land Tenure on Small Landholders’ Credit-Worthiness: Evidence from Ethiopia," Land, MDPI, vol. 12(5), pages 1-19, May.
    • Handle: RePEc:gam:jlands:v:12:y:2023:i:5:p:1055-:d:1145237
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2073-445X/12/5/1055/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2073-445X/12/5/1055/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Balana, Bedru B. & Mekonnen, Dawit & Haile, Beliyou & Hagos, Fitsum & Yimam, Seid & Ringler, Claudia, 2022. "Demand and supply constraints of credit in smallholder farming: Evidence from Ethiopia and Tanzania," World Development, Elsevier, vol. 159(C).
    2. Italo A. Gutierrez & Oswaldo Molina, 2020. "Reverting to Informality: Unregistered Property Transactions and the Erosion of the Titling Reform in Peru," Economic Development and Cultural Change, University of Chicago Press, vol. 69(1), pages 317-334.
    3. North,Douglass C., 1991. "Institutions, Institutional Change and Economic Performance," Cambridge Books, Cambridge University Press, number 9780521394161.
    4. Dufhues, Thomas & Buchenrieder, Gertrud, 2005. "Outreach of credit institutes and households' access constraints to formal credit in Northern Vietnam," Research in Development Economics and Policy (Discussion Paper Series) 8535, Universitaet Hohenheim, Department of Agricultural Economics and Social Sciences in the Tropics and Subtropics.
    5. Mukasa Adamon N. & Anthony M. Simpasa & Adeleke Oluwole Salami, 2017. "Working Paper 247 - Credit constraints and farm productivity: Micro-level evidence from smallholder farmers in Ethiopia," Working Paper Series 2356, African Development Bank.
    6. Shewakena Aytenfisu Abab & Feyera Senbeta Wakjira & Tamirat Tefera Negash, 2022. "Factors Influencing the Formalization of Rural Land Transactions in Ethiopia: A Theory of Planned Behavior Approach," Land, MDPI, vol. 11(5), pages 1-26, April.
    7. Steven Lawry & Cyrus Samii & Ruth Hall & Aaron Leopold & Donna Hornby & Farai Mtero, 2017. "The impact of land property rights interventions on investment and agricultural productivity in developing countries: a systematic review," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 9(1), pages 61-81, January.
    8. Rohan Mark Bennett & Eva-Maria Unger & Christiaan Lemmen & Paula Dijkstra, 2021. "Land Administration Maintenance: A Review of the Persistent Problem and Emerging Fit-for-Purpose Solutions," Land, MDPI, vol. 10(5), pages 1-18, May.
    9. Holden, Stein T. & Otsuka, Keijiro, 2014. "The roles of land tenure reforms and land markets in the context of population growth and land use intensification in Africa," Food Policy, Elsevier, vol. 48(C), pages 88-97.
    10. Ghebru, Hosaena & Koru, Bethlehem & Taffesse, Alemayehu Seyoum, 2016. "Household perception and demand for better protection of land rights in Ethiopia:," ESSP working papers 83, International Food Policy Research Institute (IFPRI).
    11. Deininger, Klaus & Goyal, Aparajita, 2012. "Going digital: Credit effects of land registry computerization in India," Journal of Development Economics, Elsevier, vol. 99(2), pages 236-243.
    12. Hu, Xinyan & Chen, Zhuo & Chen, Xiangpo & Liu, Ziyu, 2023. "The political trust impacts of land titling in China," Land Use Policy, Elsevier, vol. 129(C).
    13. Wenli Cheng & Nan Zhou & Longyao Zhang, 2021. "How does land titling affect credit demand, supply, access, and rationing: Evidence from China," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(3), pages 383-414, September.
    14. Deininger, Klaus & Ali, Daniel Ayalew & Alemu, Tekie, 2008. "Impacts of land certification on tenure security, investment, and land markets : evidence from Ethiopia," Policy Research Working Paper Series 4764, The World Bank.
    15. Shewakena Aytenfisu Abab & Feyera Senbeta Wakjira & Tamirat Tefera Negash, 2021. "Determinants of the Land Registration Information System Operational Success: Empirical Evidence from Ethiopia," Land, MDPI, vol. 10(12), pages 1-26, December.
    16. Bachewe, Fantu N. & Berhane, Guush & Minten, Bart & Taffesse, Alemayehu S., 2018. "Agricultural Transformation in Africa? Assessing the Evidence in Ethiopia," World Development, Elsevier, vol. 105(C), pages 286-298.
    17. Caio Piza & Mauricio José Serpa Barros de Moura, 2016. "The effect of a land titling programme on households’ access to credit," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 8(1), pages 129-155, March.
    18. Besley, Timothy, 1995. "Property Rights and Investment Incentives: Theory and Evidence from Ghana," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 903-937, October.
    19. Longyao Zhang & Wenli Cheng & Enjiang Cheng & Bi Wu, 2020. "Does land titling improve credit access? Quasi-experimental evidence from rural China," Applied Economics, Taylor & Francis Journals, vol. 52(2), pages 227-241, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shewakena Aytenfisu Abab & Feyera Senbeta & Tamirat Tefera Negash, 2023. "The Effect of Land Tenure Institutional Factors on Small Landholders’ Sustainable Land Management Investment: Evidence from the Highlands of Ethiopia," Sustainability, MDPI, vol. 15(12), pages 1-23, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shewakena Aytenfisu Abab & Feyera Senbeta & Tamirat Tefera Negash, 2023. "The Effect of Land Tenure Institutional Factors on Small Landholders’ Sustainable Land Management Investment: Evidence from the Highlands of Ethiopia," Sustainability, MDPI, vol. 15(12), pages 1-23, June.
    2. Zhou, Nan & Cheng, Wenli & Zhang, Longyao, 2022. "Land rights and investment incentives: Evidence from China’s Latest Rural Land Titling Program," Land Use Policy, Elsevier, vol. 117(C).
    3. Adamie, Birhanu Addisu, 2021. "Land property rights and household take-up of development programs: Evidence from land certification program in Ethiopia," World Development, Elsevier, vol. 147(C).
    4. Anthony Harris & Anthony D'Agostino & Sara Litke-Farzaneh & Beryl Seiler & Matt Sloan, "undated". "Morocco Land Productivity Project: Evaluation Design Report," Mathematica Policy Research Reports f3fc788501b64608b17e1cb23, Mathematica Policy Research.
    5. Wenli Cheng & Nan Zhou & Longyao Zhang, 2021. "How does land titling affect credit demand, supply, access, and rationing: Evidence from China," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(3), pages 383-414, September.
    6. Séogo, Windinkonté & Zahonogo, Pam, 2023. "Do land property rights matter for stimulating agricultural productivity? Empirical evidence from Burkina Faso," Land Use Policy, Elsevier, vol. 125(C).
    7. Ghebru, Hosaena & Girmachew , Fikirte, 2017. "Scrutinizing The Status Quo: Rural Transformation And Land Tenure Security In Nigeria," Feed the Future Innovation Lab for Food Security Policy Research Papers 264394, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).
    8. Liu, Shouying & Ma, Sen & Yin, Lijuan & Zhu, Jiong, 2023. "Land titling, human capital misallocation, and agricultural productivity in China," Journal of Development Economics, Elsevier, vol. 165(C).
    9. Hasanbasri, Ardina & Koolwal, Gayatri & Kilic, Talip & Moylan, Heather, 2021. "Multidimensionality of Land Ownership Among Men and Women in Sub-Saharan Africa," 2021 Conference, August 17-31, 2021, Virtual 315317, International Association of Agricultural Economists.
    10. Umar, Bridget Bwalya & Kaluma, Ketiwe & Kapembwa, Julius & Membele, Garikai Martin, 2023. "Does the evidence match the rhetoric? Post-formalization land investments and credit access in Zambia: Cases from informal settlements in Lusaka City region," Land Use Policy, Elsevier, vol. 129(C).
    11. Shewakena Aytenfisu Abab & Feyera Senbeta Wakjira & Tamirat Tefera Negash, 2022. "Factors Influencing the Formalization of Rural Land Transactions in Ethiopia: A Theory of Planned Behavior Approach," Land, MDPI, vol. 11(5), pages 1-26, April.
    12. Taisuke Takayama & Hirotaka Matsuda & Tomoaki Nakatani & Kuniaki Saito, 2022. "Do partial land rights increase productivity and investment? evidence from the redistributive land reform in post–world war II Japan," The Developing Economies, Institute of Developing Economies, vol. 60(2), pages 77-100, June.
    13. Ali, Daniel Ayalew & Deininger, Klaus & Goldstein, Markus, 2014. "Environmental and gender impacts of land tenure regularization in Africa: Pilot evidence from Rwanda," Journal of Development Economics, Elsevier, vol. 110(C), pages 262-275.
    14. Jérémie GIGNOUX & Karen MACOURS & Liam WREN-LEWIS, 2015. "Impact of land administration programs on agricultural productivity and rural development: existing evidence, challenges and new approaches," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 96(3), pages 467-498.
    15. Bambio, Yiriyibin & Bouayad Agha, Salima, 2018. "Land tenure security and investment: Does strength of land right really matter in rural Burkina Faso?," World Development, Elsevier, vol. 111(C), pages 130-147.
    16. Marc Bellemare & Kenn Chua & Julieth Santamaria & Khoa Vu, 2018. "Tenurial security and agricultural investment: Evidence from Vietnam," WIDER Working Paper Series 76, World Institute for Development Economic Research (UNU-WIDER).
    17. Meinzen-Dick, Ruth & Quisumbing, Agnes & Doss, Cheryl & Theis, Sophie, 2019. "Women's land rights as a pathway to poverty reduction: Framework and review of available evidence," Agricultural Systems, Elsevier, vol. 172(C), pages 72-82.
    18. Ayalew, Hailemariam & Admasu, Yeshwas & Chamberlin, Jordan, 2021. "Is land certification pro-poor? Evidence from Ethiopia," Land Use Policy, Elsevier, vol. 107(C).
    19. Minghui Zhang & Weiqi Xia, 2022. "Research on the Law of China’s Rural Land Institutional Changes: An Analytical Framework of Economic Efficiency and Distributive Equity," Land, MDPI, vol. 11(12), pages 1-15, December.
    20. Peña, Ximena & Vélez, María Alejandra & Cárdenas, Juan Camilo & Perdomo, Natalia & Matajira, Camilo, 2017. "Collective Property Leads to Household Investments: Lessons From Land Titling in Afro-Colombian Communities," World Development, Elsevier, vol. 97(C), pages 27-48.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jlands:v:12:y:2023:i:5:p:1055-:d:1145237. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.