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Financial Inclusion and Agricultural Performance Ofsmallholder Farms in Mbankomo Community
... Similarly, Akinlo (2014) establishes that access to financial services is a major role in the development of the rural poor by increasing income and facilitating investment in various sectors creates an opportunity for employment therefore reducing the vulnerability of the poor. Tambi (2018) states that development partners, private sector especially formal financial institution and governments should sensitize the smallholder farmers on the availability and existence of financial services. ...
... This is a serious challenge in the agricultural growth sector where agriculture has turned to be capital-intensive industry (Eraskine, 2014). Limited farmlands and variation in climatic conditions are some of the major challenges faced by smallholder farmers who are involved in commercial agriculture (Tambi, 2018). Technological barriers have posed as a challenge to agricultural commercialization that may prevent smallholder farmer"s access to credit, thus limiting productivity and income generation (Levine, 2005). ...
... In both communities, standard deviations indicate that poor infrastructure is not a worrying problem to agricultural commercialization. The findings seem to disagree with IPCC (2012) and Tambi (2018) who argued that climatic change has the greatest effect on agricultural production. Climatic change affects agricultural productivity contextually. ...
This study examines the contributions of financial inclusion in supporting agricultural commercialization amongst smallholder farmers in Uganda in Lango and Buganda sub-regions. The researcher adopted a comparative study and cross-sectional survey design where descriptive, bivariate and multivariate data analysis was used. Chi square procedure was run to test the hypothesis that financial inclusion does not affect agricultural commercialization amongst smallholder farmers in Lango and Buganda sub-regions. Regression analysis was specifically used to predict the level of change in agricultural commercialization due to changes in financial inclusion. The study identified financial inclusion as one variable that can predict the success of agricultural commercialization, though it varies from one region to another. In Lango, efforts by government to increase financial access is a positive factor to agricultural commercialization while in Buganda, it is a negative factor. In Lango, land is communal and not individually owned. Therefore, smallholder farmers need to access finances to purchase land for commercial farming. In Buganda, however, land is freehold, which makes smallholder farmers to own chunks of land from their parents. The study has established some common factors that limit agricultural commercialization in both Lango and Buganda, that is, expensive equipment and fluctuating prices while poor infrastructure is no longer a big worry. This paper recommends that, financial service providers should revise their lending terms downwards to reach smallholder farmers, some of whom lack collateral security to pledge for credit. While the government takes credit for improving infrastructure, government, through her policy organs like ministry of agriculture, should provide buffer prices against price fluctuations.
This paper provides new evidence on the impact of access to finance on poverty. It highlights an important channel through which access affects poverty—the labor market. The paper exploits the opening of Banco Azteca in Mexico, a unique “natural experiment” in which over 800 bank branches opened almost simultaneously in preexisting Elektra stores. Importantly, the bank has focused on previously underserved low-income clients. Our key finding is a sizeable effect of access to finance on labor market activity and income levels, especially among low-income individuals and those located in areas with lower preexisting bank penetration.
Recent data compilations show that many poor and nonpoor people in many developing countries face a high degree of financial exclusion and high barriers in access to finance. Theory and empirical evidence point to the critical role that improved access to finance has in promoting growth and reducing income inequality. An extensive literature shows the channels through which finance promotes enterprise growth and improves aggregate resource allocation. There is less evidence at the household level, however, and on the effectiveness of policies to overcome financial exclusion. The article summarizes recent efforts to measure and analyze the impact of access to finance and discusses the unfinished research agenda. Copyright The Author 2008. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank . All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org, Oxford University Press.
In many developing countries less than half the population has access to formal financial services, and in most of Africa less than one in five households has access. Lack of access to finance is often the critical mechanism for generating persistent income inequality, as well as slower economic growth. Hence expanding access remains an important challenge across the world, leaving much for governments to do. However, not all government actions are equally effective and some policies can even be counterproductive. This paper sets out principles for effective government policy on broadening access, drawing on the available evidence and illustrating with examples. The paper concludes with directions for future research. Copyright The Author 2009. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank . All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org, Oxford University Press.
integrating the results of disparate studies? (b) Are the general findings we report restricted in applicability to Asia? and (c) Does the survey, or rather the studies included in the survey, underemphasize the effects of education on allocative efficiency? We address each of these questions in the following paragraphs. Meta-analytic techniques permit quantitative estimation of "treatment" effects by aggregating information across studies.2 Aggregate estimates of the mean as well as the variability of "treatment" effect sizes are preferable to simple tallies based solely on statistical significance, since the former have greater interpretability, provide an approximate order of magnitude, do not depend on arbitrarily chosen levels of significance, and are less subject to the problem of "statistically significant, meaningfully insignificant" differences found in analyses of large samples. Moreover, meta-analytic techniques distinguish between statistically insignificant effects and zero effects, which are not the same thing. In our article, we combine effect sizes (both positive and negative) across studies to estimate the mean effects of 4 years of education on farm productivity. Our estimates are reported first unadjusted for the statistical variability of the estimated effect sizes of the individual studies, and second, adjusted by their estimated standard errors. Our conclusions, however, do not appear to be sensitive to the adjustment and are-in our opinion-more interpretable and useful than the simple tally of significant effects proposed by Phillips. In any case, since the data required to produce Phillips's appendix table are clearly presented in our article, any reader who so desired could have constructed such a table.
This article reviews the evidence on the importance of finance for economic well-being. It provides data on the use of basic
financial services by households and firms across a sample of countries, assesses the desirability of universal access, and
provides an overview of the macroeconomic, legal, and regulatory obstacles to access. Despite the benefits of finance, the
data show that use of financial services is far from universal in many countries, especially developing countries. Universal
access to financial services has not been a public policy objective in most countries and would likely be difficult to achieve.
Countries can, however, facilitate access to financial services by strengthening institutional infrastructure, liberalizing
markets and facilitating greater competition, and encouraging innovative use of know-how and technology. Government interventions
to directly broaden access to finance, however, are costly and fraught with risks, among others the risk of missing the targeted
groups. The article concludes with recommendations for global actions aimed at improving data on access and use and suggestions
on areas of further analysis to identify constraints to broadening access.
Recent studies argue that the spread-adjusted Taylor rule (STR), which includes a response to the credit spread, replicates monetary policy in the United State. We show (1) STR is a theoretically optimal monetary policy under heterogeneous loan interest rate contracts in both discretionay and commitment monetary policies, (2) however, the optimal response to the credit spread is ambiguous given the financial market structure in theoretically derived STR, and (3) there, a commitment policy is effective in narrowing the credit spread when the central bank hits the zero lower bound constraint of the policy rate.
Diplôme : Dr. d'Universite
This handbook, intended as a comprehensive source for donors, policy makers and practitioners, covers the policy, legal and regulatory issues relevant to microfinance development and examines the key elements in the process of building sustainable financial institutions with effective outreach to the poor. The handbook is divided into three parts: (1) issues to consider when providing microfinance - understanding the country context, the target market and impact analysis, products and services, and the institution; (2) designing and monitoring financial products and services - designing lending products, designing savings products and management information systems; and (3) measuring performance and managing viability - adjusting financial statements, performance indicators and performance management.
Financial Inclusion in Sub-Saharan Africa: Stylized Facts and Determinants
As a main component of financial development, financial inclusion fosters economic growth in developing countries by delivering at an affordable cost a wide array of financial services to a growing share of households and small and medium-sized corporations. Financial inclusion is limited in Sub-Saharan Africa (SSA), and in particular in the Franc zone, both in terms of bank accounts (access and intensity of use) and credit. Widespread bank account access differentials according to education, age, gender, income and location are observed.
The prevalence of financial exclusion in SSA reflects structural factors affecting both: the supply of financial services (cost, management of information asymmetries), demand (income and education level, possible self-exclusion) or weak regulatory environment and business climates. Like any other forms of financial development, financial inclusion implies new risks for financial stability and therefore, a strengthening of banking regulations and supervision so that public trust in the banking sector and increasing access to financial services goes hand in hand with sustainable and stable economic development.
Classification JEL: G21, G28, O16, O55.
Over the past two decades the effectiveness of subsidized credit programs in improving the productivity of traditional farmers in developing countries has been extensively debated. This study analyzes the effects of one such program—PRODEMATA—on the technical and allocative efficiency of traditional farmers in Minas Gerais, Brazil. The empirical results suggest that PRODEMATA has had no effect on technical efficiency and a slightly negative effect on allocative efficiency.
This paper presents estimates, for more than 160 countries, of the fraction of the adult population using formal financial intermediaries. The estimates are constructed by combining information on account numbers at banks and microfinance institutions (together with banking depth and GDP data) with estimates from household surveys for a smaller set of countries. An illustrative application of the data compares them with information on poverty: there is a correlation, but it is not clearly causal.
The article examines the contribution of financial development to poverty reduction in developing countries. Building on earlier research which has established links between financial development and economic growth, and between economic growth and poverty reduction, the article tests for a causal process linking financial sector growth and poverty reduction. The empirical results indicate that, up to a threshold level of economic development, financial sector growth contributes to poverty reduction through the growth-enhancing effect. The impact of financial development on poverty reduction will be affected, however, by any change in income inequality resulting from financial development.
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