Land Tenure Security and Access to Finance of Agricultural Households in Cameroon

This study investigates the relationship between the land tenure security and the financing of agricultural households. The study uses data from the third Cameroun Household Survey (ECAM3), carried out by the National Institute of Statistics in 2007. The study has two objectives. The first objective investigates the effect of the land tenure security on the access to finance of agricultural households; the second assesses the impact of the land tenure security on the volume of credit extended to agricultural households. The regression switching model is used. The study assumes formal and informal financing sources. The empirical results reveal different impact of land property rights on the access to financing of the agricultural households. Precisely, the legal land title improves by 5.4% the possibility to access to formal financing. On the other hand, the land title, whether legally of customarily defined, increases by 20% the possibility of access to informal financing. Such results imply a double orientation of economic policy. The first should set up a financing scheme adapted to rural environment. The second should aim to reconcile the legal and customary land property rights in order to ensure higher economic efficiency of the land property rights.