CREDIT RATIONING IN KENYAN AGRICULTURAL HOUSEHOLDS AND UPTAKE OF RISK CONTINGENT CREDIT: EVIDENCE FROM THE FIELD
There is an increasing focus on the potential for financial products to improve the welfare of smallholder farmers in developing countries. This paper reports on research conducted in the Machakos region of Kenya to understand the credit rationing status of smallholder households and the potential of a novel financial product, risk contingent credit (RCC), to open access to credit markets for households who may have previously voluntarily withdrawn from the credit markets. We find that households do not show a preference for RCC as compared to a normal credit offering, but that the intervention did lead to quantity and risk rationed households acting in a similar manner to the price rationed households. These findings highlight the importance of extending credit access to agricultural smallholders and point to the need for further research into RCC.
Kenya; Index Insurance; Agriculture economics; Agricultural Finance; Credit Rationing; Risk Contingent Credit; Smallholders; Environmental economics
Turvey, Calum G.
Shee, Apurba; Tobin, John
Applied Economics and Management
M.S., Applied Economics and Management
Master of Science
dissertation or thesis