Causes and Implications of Credit Rationing in Rural Ethiopia : The Importance of Spatial Variation

Ali, Daniel Ayalew ; Deininger, Klaus

World Bank, Washington, DC

关键词: ACCESS TO CAPITAL;    ACCESS TO CREDIT;    ACCESS TO FORMAL CREDIT;    ACCESS TO LOANS;    ADVERSE SELECTION;   

DOI  :  10.1596/1813-9450-6096
RP-ID  :  WPS6096

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper uses Ethiopian data toexplore credit rationing in semi-formal credit markets andits effects on farmers' resource allocation and cropproductivity. Credit rationing -- both voluntarily andinvoluntarily -- is found to be widespread in the sampledrural villages, largely because of risk-related factors.Political and social networks emerge as key determinants ofaccess to credit among smallholder, peasant farmers.Significant regional variation emerges as well. Inhigh-potential, surplus producing areas where credit islargely used for agricultural production, eliminating creditconstraints is estimated to increase productivity by roughly11 percentage points. By contrast, in low-productivity,drought prone areas where loans were rarely used to acquireinputs for crop production, the authors find no relationshipbetween credit rationing and agricultural productivity. Tobe effective, efforts to improve agricultural productivitynot only need to increase credit supply, but also explorethe reasons for credit rationing and the availability ofproductive opportunities.