Are smallholder farmers credit constrained? evidence on demand and supply constraints of credit in Ethiopia and Tanzania

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dc.creatorBalana, Bedru
dc.creatorMekonnen, Dawit Kelemework
dc.creatorHaile, B.
dc.creatorHagos, Fitsum
dc.creatorYimam, S.
dc.creatorRingler, Claudia
dc.date2020-11-01
dc.date2021-01-02T05:49:31Z
dc.date2021-01-02T05:49:31Z
dc.date.accessioned2026-06-27T15:33:40Z
dc.descriptionCredit constraint is considered by many as one of the key barriers to adoption of modern agricultural technologies, such as chemical fertilizer, improved seeds, and irrigation technologies, among smallholders. Past research and much policy discourse associates agricultural credit constraints with supply-side factors, such as limited access to credit sources or high costs of borrowing. However, demand-side factors, such as risk-aversion and financial illiteracy among borrowers, as well as high transaction costs, can also play important roles in credit-rationing for smallholders. Using primary survey data from Ethiopia and Tanzania, this study examines the nature of credit constraints facing smallholders and the factors that affect credit constraints. In addition, we assess whether credit constraints are gender-differentiated. Results show that demand-side credit constraints are at least as important as supply-side factors in both countries. Women are more likely to be credit constrained (from both the supply and demand sides) than men. Based on these findings, we suggest that policies should focus on addressing both supply- and demand-side credit constraints, including through targeted interventions to reduce risk, such as crop insurance and gender-sensitive policies to improve women’s access to credit.
dc.formatapplication/pdf
dc.identifierhttps://hdl.handle.net/10568/110680
dc.identifier.urihttp://hdl.handle.net/123456789/107842
dc.languageen
dc.publisherInternational Food Policy Research Institute
dc.relationhttps://doi.org/10.1177/0973801020919840
dc.relationhttps://doi.org/10.1007/s12571-018-0812-5
dc.relationhttps://doi.org/10.1016/j.wds.2022.100012
dc.relationhttps://hdl.handle.net/10568/150130
dc.relationhttps://doi.org/10.2499/p15738coll2.133847
dc.rightsOpen Access
dc.sourceBalana, Bedru; Mekonnen, Dawit Kelemework; Haile, Beliyou; Hagos, Fitsum; Yiman, Seid; and Ringler, Claudia. 2020. Are smallholder farmers credit constrained? Evidence on demand and supply constraints of credit in Ethiopia and Tanzania. IFPRI Discussion Paper 1974. Washington, DC: International Food Policy Research Institute (IFPRI). https://doi.org/10.2499/p15738coll2.134152.
dc.subjectfinancial institutions
dc.subjectmicrofinance
dc.subjectgender
dc.subjectpolicies
dc.subjectfarmers
dc.subjectconstraints
dc.subjectsocioeconomic environment
dc.subjectagricultural credit
dc.subjectagriculture
dc.subjectsmallholders
dc.subjectadoption
dc.subjectirrigation
dc.subjectsmall scale systems
dc.subjecteconometric models
dc.subjectsmall-scale aquaculture
dc.subjectcredit
dc.subjectrisk factors
dc.subjectloans
dc.subjectsupply balance
dc.subjectagricultural technology
dc.subjecttechnology transfer
dc.subjecthouseholds
dc.subjecttechnology
dc.subjectwomen
dc.titleAre smallholder farmers credit constrained? evidence on demand and supply constraints of credit in Ethiopia and Tanzania
dc.typeWorking Paper

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Instituto Internacional de Investigación sobre Políticas Alimentarias (IFPRI)