Determinants of demand for credit by smallholder farmers': a farm level analysis based on survey in Sindh, Pakistan

• Published in: Journal of Asian Business and Economic Studies Vol. 28; no. 3; pp. 225 - 240
• Main Authors: Chandio, Abbas Ali, Jiang, Yuansheng, Rehman, Abdul, Twumasi, Martinson Ankrah, Pathan, Amber Gul, Mohsin, Muhammad
• Format: Journal Article
• Language: English
• Published: Bingley Emerald Publishing Limited 09.08.2021; Emerald Group Publishing Limited; Emerald Publishing
• Subjects: Agricultural lending; Agriculture; Cocoa; demand for credit; determinants; Economic growth; Farmers; Financial institutions; Households; o13; ols approach; pakistan; q14; q18; Sindh Pakistan; Pakistan; O13; Pakistan; Q14; Determinants; Q18; OLS approach; Demand for credit
• ISSN: 2515-964X; 2515-964X
• DOI: 10.1108/JABES-01-2020-0004

PurposeIn the developing countries, formal credit has dominant role for the development of agriculture sector. It increases the farmer's purchasing power for better farm inputs and agricultural technology for high crop productivity. The main purpose of this study is to examine the influence of socioeconomic characteristics of smallholder farmers for credit demand in Sindh, Pakistan.Design/methodology/approachA cross-sectional data set randomly collected from 90 smallholder farmers in Thatta district, Sindh, Pakistan, is examined. Descriptive statistics, correlation and the OLS regression method were used to demonstrate the important factors affecting the demand for formal credit.FindingsThe results revealed that formal education, experience of farming, landholding size, road access and extension contacts positively and significantly influenced the demand for formal credit.Originality/valueThis study is the first, to the best of authors' knowledge, to demonstrate the influence of various socioeconomic characteristics of smallholder farmers on demand for formal credit in Sindh, Pakistan. It also illustrates the imperative contribution to the literature regarding credit access and demand to improve the agricultural productivity.