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Role of Access to Credit in Rice Production in Sub-Saharan Africa: The Case of Mwea Irrigation Scheme in Kenya

Role of Access to Credit in Rice Production in Sub-Saharan Africa: The Case of Mwea Irrigation... AbstractThis study explores the role of access to credit in improving rice production in Sub-Saharan Africa using the case of rice farmers in the large-scale Mwea irrigation scheme in Kenya. Using household level survey data, we find that the use of fertiliser and paddy yield per hectare are not significantly different among borrowers from the cooperative society, borrowers from rice traders and non-borrowers. However, borrowers from rice traders receive lower incomes and profits compared with non-borrowers largely due to the higher interest charged. Considering that such farmers who borrow from rice traders are generally poorer in financial, physical, and human capital and would have even made lower income and profit without rice trader credit, we suggest policies to facilitate further development of credit markets for both efficiency and equity of rice production in Mwea. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of African Economies Oxford University Press

Role of Access to Credit in Rice Production in Sub-Saharan Africa: The Case of Mwea Irrigation Scheme in Kenya

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References (1)

Publisher
Oxford University Press
Copyright
© The author 2015. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: journals.permissions@oup.com
ISSN
0963-8024
eISSN
1464-3723
DOI
10.1093/jae/ejv024
Publisher site
See Article on Publisher Site

Abstract

AbstractThis study explores the role of access to credit in improving rice production in Sub-Saharan Africa using the case of rice farmers in the large-scale Mwea irrigation scheme in Kenya. Using household level survey data, we find that the use of fertiliser and paddy yield per hectare are not significantly different among borrowers from the cooperative society, borrowers from rice traders and non-borrowers. However, borrowers from rice traders receive lower incomes and profits compared with non-borrowers largely due to the higher interest charged. Considering that such farmers who borrow from rice traders are generally poorer in financial, physical, and human capital and would have even made lower income and profit without rice trader credit, we suggest policies to facilitate further development of credit markets for both efficiency and equity of rice production in Mwea.

Journal

Journal of African Economies – Oxford University Press

Published: Mar 1, 2016

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