Microfinance services for smallholder farmers: An assessment from rice farmers' expectations in Central Benin

This study analyzed the adequacy between credit supply and the expectations of rice farmers in Central Benin to define policies for improved agricultural-oriented financial services. A survey was conducted in October 2016 among 120 rice farmers randomly selected from six rice-farming villages. Data...

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Bibliographic Details
Published in:Agricultural and food economics 2020-08, Vol.8 (1), p.1-15, Article 20
Main Authors: Dossou, Smith A. R, Aoudji, Augustin K. N, Houessou, Albertine M, Kaki, Rodrigue S
Format: Article
Language:English
Subjects:
Adequacy
Agricultural Economics
Agricultural policy
Agriculture
Benin
Cluster analysis
Contract farming
Credit access
Economics
Economics and Finance
Expectations
Farmers
Farming
Finance
Financial services
Microfinance
Multivariate analysis
Perception
Principal components analysis
Rice
Rice farming
Small farms
Technical services
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Summary:This study analyzed the adequacy between credit supply and the expectations of rice farmers in Central Benin to define policies for improved agricultural-oriented financial services. A survey was conducted in October 2016 among 120 rice farmers randomly selected from six rice-farming villages. Data collected through structured and semi-structured interviews included the financial services offered by Microfinance Institutions, socio-demographic characteristics of rice farmers, their expectations and perception. Multivariate analysis combining hierarchical ascending cluster analysis and principal component analysis (PCA) was used to define the distinct groups of rice farmers according to their credit expectations. The unmet expectations of rice farmers for a credit scheme that suits their needs were identified based on the gaps between their expectations and perception. There were three rice farmers' clusters with distinct characteristics based on their expectations. These farmers were not satisfied with all the attributes of the current credit scheme. Pending the effectiveness of the agricultural bank, the approaches such as the inventory credit system are useful in facilitating credit access to smallholder farmers. It is also essential to combine credit supply with financial education and technical support in a system such as contract farming.
ISSN:2193-7532
2193-7532
DOI:10.1186/s40100-020-00165-1