The Impact of Farm Credit in Pakistan

Vista sencilla de ítem
dc.creatorFaruqee, Rashidur R.
dc.creatorKhandker, Shahidur R.
dc.date2014-05-08T19:38:29Z
dc.date2014-05-08T19:38:29Z
dc.date2001-08
dc.date.accessioned2026-07-01T01:22:09Z
dc.descriptionBoth formal, and informal loans matter in agriculture. But formal lenders provide much more in production lending, than do informal lenders, often at a higher cost than what they can recover. The Agricultural Development Bank of Pakistan (ADBP), for example, providing about 90 percent of formal loans in rural areas, incurs high costs on loan defaults. Like other governments, the Government of Pakistan subsidized the formal scheme on the grounds that lending to agriculture is a high-risk activity, because of covariate risk. Because farm credit schemes are subsidized, policymakers must know if these schemes are worth supporting. Using recent data from a large household survey from rural Pakistan, the authors estimate the cost-effectiveness of the ADBP loans. To estimate credit's impact, they use a two-stage method, which takes into account the endogeneity of borrowing. Clearly, formal lenders are biased toward larger farmers with collateral. Large landowners, who tend to represent only four percent of rural households, get 42 percent of formal loans. Landless, and subsistence farmers, who represent more than 69 percent of rural households, receive only 23 percent of formal loans. ADBP loans improve household welfare but, although large farmers receive most of ADBP finance, the impact of credit is greater for small farmers than for large farmers. Large landowners use formal loans unproductively. Because the ADBP scheme is subsidized, it is not cost-effective for delivering rural credit. It would be more cost-effective is small farmers were better targeted instead.
dc.formatapplication/pdf
dc.formattext/plain
dc.identifierhttps://hdl.handle.net/10986/18200
dc.identifierhttps://doi.org/10.1596/1813-9450-2653
dc.identifier.urihttp://hdl.handle.net/123456789/417458
dc.languageen_US
dc.publisherWorld Bank, Washington, DC
dc.relationPolicy Research Working Paper;No. 2653
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectAgricultural development
dc.subjectRural credit
dc.subjectFarm capital
dc.subjectCreditworthiness
dc.subjectCredit-based livelihood programs
dc.subjectRisk management
dc.subjectLoan defaults
dc.subjectSubsidized credits
dc.subjectCovariate risks
dc.subjectCost-effectiveness
dc.subjectLandless laborers
dc.subjectSubsistence farming
dc.subjectCollateral
dc.subjectaccess to credit
dc.subjectaccounting
dc.subjectADB
dc.subjectagricultural credit
dc.subjectagricultural output
dc.subjectagricultural production
dc.subjectagriculture
dc.subjectasymmetric information
dc.subjectbenefit analysis
dc.subjectborrowing
dc.subjectcommercial banks
dc.subjectconsumption increases
dc.subjectcosts of borrowing
dc.subjectcredit cost
dc.subjectcredit demand
dc.subjectcredit institutions
dc.subjectcredit market
dc.subjectcredit markets
dc.subjectcredit programs
dc.subjectcredit rationing
dc.subjectcredit risk
dc.subjectcredit schemes
dc.subjectcredit transactions
dc.subjectdeposit accounts
dc.subjectdeposits
dc.subjectdiminishing returns
dc.subjecteconometric evidence
dc.subjecteconometric models
dc.subjectelasticity
dc.subjectentrepreneurship
dc.subjectexpenditures
dc.subjectfarm credit
dc.subjectfinancial institutions
dc.subjectfish
dc.subjectFood Policy Research
dc.subjectGDP
dc.subjectgovernment intervention
dc.subjectgross value
dc.subjectincome
dc.subjectinflation
dc.subjectinterest income
dc.subjectinterest rate
dc.subjectinterest rates
dc.subjectlabor productivity
dc.subjectloan defaults
dc.subjectmoral hazard
dc.subjectnet profit
dc.subjectnet value
dc.subjectnet worth
dc.subjectnominal interest rate
dc.subjectopportunity cost
dc.subjectproducers
dc.subjectproduction costs
dc.subjectproduction increases
dc.subjectproductivity
dc.subjectreal rate of interest
dc.subjectrepayment
dc.subjectreturn on equity
dc.subjectrural credit
dc.subjectsavings
dc.subjecttransaction costs
dc.subjectwealth
dc.subjectworking capital
dc.titleThe Impact of Farm Credit in Pakistan

Archivos

Colecciones

AgroKnow