Can Group Based Credit Uphold Smallholder Farmers Productivity and Reduce Poverty in Africa? Empirical Evidence from Kenya
With access to formal credit proving almost impossible to smallholder farmers, group based lending is steadily becoming popular in Africa. However, little is documented on the role of such programmes. In this paper, we employ propensity score matching and endogenous switching regime methods on a sample of 600 smallholder farmers drawn from two agricultural regions in Kenya in 2007. The goal of the survey was to evaluate the economic impact of group based credit programmes on smallholder farmers’ productive performance and poverty reduction in Kenya. Our findings reveal gains with significant impacts of group based credit on incomes in the range of 300 and 480 euros as well as via purchased inputs, with participation in such credit programmes significantly constrained by low literacy levels prevalent among a majority of rural farm households, influence of gender, with female headed households dominating in membership and little participation on the part of male headed households, poor rural access road infrastructure and constraints in group management resulting from lack of cohesion as the group grows in membership. These factors form the key recommendations for policy intervention to achieve sustainability of group based informal lending among farm households in Africa and other similar developing nations.
|Date of creation:||20 Aug 2009|
|Contact details of provider:|| Web page: http://www.eaae.org|
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ags:eaa111:52806. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.