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Smallholders’ Access to Rural Credit: Evidence from Pakistan

Author

Listed:
  • Shehla Amjad

    (COMSATS Institute of Information Technology, Abbottabad, Pakistan.)

  • SAF Hasnu

    (COMSATS Institute of Information Technology, Abbottabad, Pakistan.)

Abstract
This paper presents an analysis of smallholders’ access to rural credit and the cost of borrowing using survey data from Pakistan. Rural credit in Pakistan comes from formal and various informal sources. The tenure status, family labor, literacy status, off-farm income, value of non-fixed assets and infrastructure quality are found to be the most important variables in determining access to formal credit. On the other hand, the total operated area, family labor, literacy status and off-farm income are found to be the most important factors in determining the credit status of the smallholders from informal sources. The results show that the cost of borrowing from formal sources falls asthe size of holding increases. The analysis confirms the importance of informal credit, especially to the smallest of the smallholders and tenant cultivators.

Suggested Citation

  • Shehla Amjad & SAF Hasnu, 2007. "Smallholders’ Access to Rural Credit: Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 12(2), pages 1-25, Jul-Dec.
    • Handle: RePEc:lje:journl:v:12:y:2007:i:2:p:1-25
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    File URL: http://121.52.153.179/JOURNAL/Vol.12,%20No.2/Shehla.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

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    2. Souza Machado, Bruno & Lelis, Lorena & De Figueiredo Silva, Felipe & De Carvalho Reis Neves, Mateus, 2024. "Credit and off-farm income: an analysis of the PRONAF on family-owned farms in Brazil," 2024 Annual Meeting, July 28-30, New Orleans, LA 343653, Agricultural and Applied Economics Association.
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    4. Abbas Ali Chandio & Yuansheng Jiang & Abdul Rehman, 2018. "Credit margin of investment in the agricultural sector and credit fungibility: the case of smallholders of district Shikarpur, Sindh, Pakistan," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 4(1), pages 1-10, December.
    5. T. O Ojo & L.J. S Baiyegunhi & A. O Salami, 2019. "Impact of Credit Demand on the Productivity of Rice Farmers in South West Nigeria," Journal of Economics and Behavioral Studies, AMH International, vol. 11(1), pages 166-180.
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    8. Kassouri, Yacouba & Kacou, Kacou Yves Thierry, 2022. "Does the structure of credit markets affect agricultural development in West African countries?," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 588-601.
    9. Shiferaw, Kaleb & GEBEREMEDHIN, Berhanu & LEGESSE, DEREJE, 2015. "What factors affect households’ decision to allocate credit for livestock production? Evidence from Ethiopia," MPRA Paper 69344, University Library of Munich, Germany.
    10. Elahi, Ehsan & Abid, Muhammad & Zhang, Liqin & ul Haq, Shams & Sahito, Jam Ghulam Murtaza, 2018. "Agricultural advisory and financial services; farm level access, outreach and impact in a mixed cropping district of Punjab, Pakistan," Land Use Policy, Elsevier, vol. 71(C), pages 249-260.
    11. Ali Raza & Guangji Tong & Furqan Sikandar & Vasilii Erokhin & Zhang Tong, 2023. "Financial Literacy and Credit Accessibility of Rice Farmers in Pakistan: Analysis for Central Punjab and Khyber Pakhtunkhwa Regions," Sustainability, MDPI, vol. 15(4), pages 1-24, February.
    12. Farhad Zulfiqar & Raza Ullah & Muhammad Abid & Abid Hussain, 2016. "Cotton production under risk: a simultaneous adoption of risk coping tools," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 84(2), pages 959-974, November.

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