Click here for search results
Credit constraints, agricultural productivity, and rural nonfarm participation : evidence from Rwanda
 
Author:Ali, Daniel Ayalew; Deininger, Klaus; Duponchel, Marguerite; Collection Title:Policy Research working paper ; no. WPS 6769
Country:Rwanda; Date Stored:2014/02/06
Document Date:2014/02/01Document Type:Policy Research Working Paper
SubTopics:Bankruptcy and Resolution of Financial Distress; Economic Theory & Research; Banks & Banking Reform; Debt Markets; Financial IntermediationLanguage:English
Major Sector:Public Administration, Law, and Justice; Agriculture, fishing, and forestry; FinanceRel. Proj ID:1W-Land Policies For Growth And Poverty Reduction: Moving Towards -- -- P095390;
Region:AfricaReport Number:WPS6769
Sub Sectors:General agriculture, fishing and forestry sector; General public administration sector; Housing financeTF No/Name:TF095610-Computerization; TF096734-Impact Evaluation of Land Tenure Regularization in Rwanda; TF097647-India Gendered impacts of NREGA; TF098730-BNPP-GENDER; TF092028-GENDER; TF091533-GENDER; TF091531-GENDER; TF092663-EVALUATING THE EFFECTIVENESS OF SUSTAINABLE LAND MANAGEMENT INTERVENTIO; TF098469-New Approaches to securing land tenure in Sub-Saharan Africa
Volume No:1 of 1  

Summary: Although the potentially negative impacts of credit constraints on economic development have long been discussed conceptually, empirical evidence for Africa remains limited. This study uses a direct elicitation approach for a national sample of Rwandan rural households to assess empirically the extent and nature of credit rationing in the semi-formal sector and its impact using an endogenous sample separation between credit-constrained and unconstrained households. Being credit constrained reduces the likelihood of participating in off-farm self-employment activities by about 6.3 percent while making participation in low-return farm wage labor more likely. Even within agriculture, elimination of all types of credit constraints in the semi-formal sector could increase output by some 17 percent. Two suggestions for policy emerge from the findings. First, the estimates suggest that access to information (education, listening to the radio, and membership in a farm cooperative) has a major impact on reducing the incidence of credit constraints in the semi-formal credit sector. Expanding access to information in rural areas thus seems to be one of the most promising strategies to improve credit access in the short term. Second, making it easy to identify land owners and transfer land could also significantly reduce transaction costs associated with credit access.

Official Documents
Official, scanned versions of documents (may include signatures, etc.)
File TypeDescriptionFile Size (mb)
PDF 30 pagesOfficial version*2.1 (approx.)
TextText version**
How To Order

See documents related to this project
* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.
** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.



Permanent URL for this page: http://go.worldbank.org/A9Q24C1XG0