Analysis of the Determinants of Access to Agricultural Credit at Local Bank of Mutual Agricultural Credit
Casemir B. Houngbedji *
Faculty of Economics and Management, Laboratory of Research in Economics and Management (LAREG), University of Parakou, Box P: 123 Parakou, Benin.
Dramane Salami
Faculty of Economics and Management, Laboratory of Research in Economics and Management (LAREG), University of Parakou, Box P: 123 Parakou, Benin.
*Author to whom correspondence should be addressed.
Abstract
The objective of this paper is to determine the factors that favour the granting of credit in the microfinance institution at the Local Bank of Mutual Agricultural Credit (LBMAC) the largest in BENIN in a rural area. In methodological terms, the estimation of a logistic regression model has been made. Several variables are collected to explain access to agricultural credit in the institution. The results of the estimates show that, having one person as a guarantor and the seniority in obtaining the loan influence the granting of credit. As a result, the LBMAC is very selective, greatly limiting the demand for credit from farmers. So, economic policies must offer favourable conditions for micro-finance in the agricultural sector to increase their numbers and also allow them to be less selective.
Keywords: Determinants, agricultural credit, smallholder logistic regression model, LBMAC JEL Classification: Code: E23, Q14.