Smallholder farmers’ access to credit in the Amathole District Municipality, Eastern Cape Province, South Africa

Provision of credit has being identified as an important instrument for improving the welfare of smallholder farmers directly and for enhancing productive capacity through financing investment by the farmers in their human and physical capital. This study investigated the individual and household characteristics that influence credit market access in Amathole District Municipality, Eastern Cape Province, South Africa, using a cross sectional data from smallholder farmers’ household survey. The aim is to provide a better understanding of the households’ level socio-economic characteristics, not only because they influence household’s demand for credit but also due to the fact that potential lenders are most likely to base their assessment of borrowers’ creditworthiness on such characteristics. The results of the logistic regression suggest that credit market access was significantly influenced by variables such as gender, education, households’ income, value of assets, savings, dependency ratio, repayment capacity and social capital. Implications for rural credit delivery are discussed.

The Transatlantic Trade and Investment Partnership (TTIP)

The United States of America and the European Union are currently negotiating a Transatlantic Trade and Investment Partnership (TTIP). It is one of the most ambitious free trade and investment initiatives, going much further than eliminating tariffs. TTIP mainly aims at reducing “non-tariff barriers”. While tariffs on goods have been imposed with an eye to foreign competition, most of the non-tariff barriers are the laws and regulations that are the result of social struggles for the protection of consumers and workers. It is therefore certain that TTIP will impact workers. This volume provides a preliminary assessment of the likely consequences for labor by: - providing an overall introduction to the TTIP negotiations; -assessing the reliability of the studies claiming employment gains; - highlighting specific problematic proposals such as the investor-to-state dispute settlement mechanism; - presenting the position of organized labor from both sides of the Atlantic. / Among the contributors are Stefan Beck (Kassel), Lance Compa (Ithaca, New York), Pia Eberhardt (Brussels) and Werner Raza (Vienna).

Reforming Cooperative Credit Structure in India for Financial Inclusion

In the drive for financial inclusion in India, cooperative banks assume prime importance as they are much more accessible to the rural poor than commercial banks. While more accessible, cooperative banks' financial health is rather poor and, therefore, might not be able to serve the needy in a sustained manner. A committee led by Prof. Vaidyanathan has outlined a revival package for cooperatives. Besides suggesting an infusion of funds, it called for the adherence to certain stringent norms to ensure the financial viability. The recommendations provided in the committee’s report are under various stages of implementation in India. The book examines the progress of this reform drive in Bihar, a state in Eastern India. It discusses the background for appointing the committee and its recommendations and also presents the findings of a field study conducted in this regard. The findings inform further policy suggestions which are of general interest to the drive for financial inclusion also in other countries.

Poverty targeting and income impact of subsidised credit on accessed households in the Northern Mountainous Region of Vietnam

This paper uses the data of 1338 rural households in the Northern Mountainous Region of Vietnam to examine the extent to which subsidised credit targets the poor and its impacts. Principal Component Analysis and Propensity Score Matching were used to evaluate the depth of outreach and the income impact of credit. To address the problem of model uncertainty, the approach of Bayesian Model Average applied to the probit model was used. Results showed that subsidised credit successfully targeted the poor households with 24.10% and 69.20% of clients falling into the poorest group and the three bottom groups respectively. Moreover, those who received subsidised credit make up 83% of ethnic minority households. These results indicate that governmental subsidies are necessary to reach the poor and low income households, who need capital but are normally bypassed by commercial banks. Analyses also showed that ethnicity and age of household heads, number of helpers, savings, as well as how affected households are by shocks were all factors that further explained the probability at which subsidised credit has been assessed. Furthermore, recipients obtained a 2.61% higher total income and a 5.93% higher farm income compared to non-recipients. However, these small magnitudes of effects are statistically insignificant at a 5% level. Although the subsidised credit is insufficient to significantly improve the income of the poor households, it possibly prevents these households of becoming even poorer.

An analysis of household farm investment decisions under varying land tenure arrangements in Ghana

Land tenure insecurity is widely perceived as a disincentive for long-term land improvement investment hence the objective of this paper is to evaluate how tenure (in)security associated with different land use arrangements in Ghana influenced households’ plot level investment decisions and choices. The paper uses data from the Farmer-Based Organisations (FBO) survey. The FBO survey collected information from 2,928 households across three ecological zones of Ghana using multistaged cluster sampling. Probit and Tobit models tested the effects of land tenancy and ownership arrangements on households’ investment behaviour while controlling other factors. It was found that marginal farm size was inversely related to tenure insecurity while tenure insecurity correlate positively with value of farm land and not farm size. Individual ownership and documentation of land significantly reduced the probability of households losing uncultivated lands. Individual land ownership increased both the probability of investing and level of investments made in land improvement and irrigation probably due to increasing importance households place on land ownership. Two possible explanations for this finding are: First, that land markets and land relations have changed significantly over the last two decades with increasing money transaction and fixed agreements propelled by population growth and increasing value of land. Secondly, inclusion of irrigation investment as a long term investment in land raises the value of household investment and the time period required to reap the returns on the investments. Households take land ownership and duration of tenancy into consideration if the resource implications of land investments are relatively huge and the time dimension for harvesting returns to investments is relatively long.