Factors Influencing Informal Credit Access and Utilization among Smallholder Farmers: Insights from Mountainous Regions of Pakistan
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F60460709%3A41340%2F24%3A100879" target="_blank" >RIV/60460709:41340/24:100879 - isvavai.cz</a>
Result on the web
<a href="https://doi.org/10.3390/agriculture14101764" target="_blank" >https://doi.org/10.3390/agriculture14101764</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.3390/agriculture14101764" target="_blank" >10.3390/agriculture14101764</a>
Alternative languages
Result language
angličtina
Original language name
Factors Influencing Informal Credit Access and Utilization among Smallholder Farmers: Insights from Mountainous Regions of Pakistan
Original language description
Access to credit plays an important role in the adoption of modern agricultural practices, such as better seeds, pesticides, and fertilizers, as well as in the sustainable utilization of land by smallholder farmers. This study explores the dynamics of smallholders' access to and utilization of informal credit to manage local farming systems. The data were collected from rural households in the Dir Kohistan mountainous region of Pakistan in 2021. A bivariate probit model was employed to analyze the data from 300 randomly selected farming households. Our findings indicate that a significant proportion of respondents (70%) reported having access to informal credit, with 65% actively utilizing credit to bolster the economic viability of their farms. This study reveals various strategies that farmers employ in response to credit constraints. The majority of farmers (69%) prioritize meeting their own farm/household needs. Social networks, particularly friends, emerge as key sources of informal credit (58.1%). The results of the bivariate probit regression analysis identify positive relationships with fellow farmers and neighbors/relatives, along with a lower perceived risk, as the most significant factors influencing access to and utilization of informal credit. Therefore, our study recommends the promotion of relationships and linkages among farmers through facilitated networking events, introducing risk mitigation measures and promoting financial literacy programs to empower smallholder capacities on the credit market. Policymakers are urged to recognize the role of social relationships and consider policies that promote community credit practices for the overall financial well-being of farmers, especially in more isolated mountain areas.
Czech name
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Czech description
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Classification
Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
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OECD FORD branch
40500 - Other agricultural sciences
Result continuities
Project
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Continuities
S - Specificky vyzkum na vysokych skolach
Others
Publication year
2024
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
Agriculture-BASEL
ISSN
2077-0472
e-ISSN
2077-0472
Volume of the periodical
14
Issue of the periodical within the volume
OCT 2024
Country of publishing house
CH - SWITZERLAND
Number of pages
15
Pages from-to
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UT code for WoS article
001340811400001
EID of the result in the Scopus database
2-s2.0-85207677086