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Access to Credit and Economic Well-Being of Rural Households: Evidence from Eastern India

Author

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  • Kumar, Anjani
  • Mishra, Ashok K.
  • Sonkar, Vinay K.
  • Saroj, Sunil

Abstract

We evaluate the impact of access to credit on rural households’ annual income using an endogenous switching regression approach, an increasingly popular method of tackling the selection bias issue in impact analyses. Using a large survey of rural households in eastern India, we find that access to credit is strongly associated with rural households’ socioeconomic and demographic characteristics. Additionally, access to credit increases rural households’ economic well-being; nonborrower rural households would benefit the most from access to credit. Access to credit affects recipients heterogeneously, implying that credit policies should be adaptable to different rural household groups.

Suggested Citation

  • Kumar, Anjani & Mishra, Ashok K. & Sonkar, Vinay K. & Saroj, Sunil, 2020. "Access to Credit and Economic Well-Being of Rural Households: Evidence from Eastern India," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 45(1), January.
    • Handle: RePEc:ags:jlaare:298439
    DOI: 10.22004/ag.econ.298439
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    1. Arnold L. Musungu & Beatrice W. Muriithi & Changeh J. Ghemoh & Dorothy Nakimbugwe & Chrysantus M. Tanga, 2023. "Production, consumption, and market supply of edible crickets: insights from East Africa," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-23, December.
    2. Deepak Varshney & Anjani Kumar & Ashok K. Mishra & Shahidur Rashid & Pramod K. Joshi, 2021. "COVID‐19, Government Transfer Payments, and Investment Decisions in Farming Business: Evidence from Northern India," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(1), pages 248-269, March.
    3. Ndiaye, Alioune, 2021. "Diversify or Specialise? Impacts of Diversification on Household Welfare and Inequalities in Pastoral Areas in Senegal," 2021 Conference, August 17-31, 2021, Virtual 315898, International Association of Agricultural Economists.
    4. Birthal, Pratap S. & Hazrana, Jaweriah & Roy, Devesh & Satyasai, K. J. S, 2024. "Can Finance Mitigate Climate Risks in Agriculture? Farm-level Evidence from India," Policy Papers 344992, ICAR National Institute of Agricultural Economics and Policy Research (NIAP).
    5. Kumar, Anjani & Sonkar, Vinay K. & S., Aditya K., 2021. "Food Security – Status and Determinants – during the Covid-19 Lockdown: Evidence from Primary Survey in Eastern India," 2021 Conference, August 17-31, 2021, Virtual 315344, International Association of Agricultural Economists.
    6. Awal Abdul‐Rahaman & Gazali Issahaku & Wanglin Ma, 2023. "Agrifood system participation and production efficiency among smallholder vegetable farmers in Northern Ghana," Agribusiness, John Wiley & Sons, Ltd., vol. 39(3), pages 812-835, July.
    7. Li, Changsheng & Ma, Wanglin & Mishra, Ashok K. & Gao, Liangliang, 2020. "Access to credit and farmland rental market participation: Evidence from rural China," China Economic Review, Elsevier, vol. 63(C).
    8. Tuan Nguyen‐Anh & Shawn Leu & Anh Nguyen‐Thi‐Phuong & Thanh Ngo‐Dang & Nguyen To‐The, 2023. "Adapting to the new normal: A sustainable livelihood framework for the informal sectors during COVID‐19," Review of Development Economics, Wiley Blackwell, vol. 27(2), pages 1092-1112, May.
    9. Anjani Kumar & Ashok K. Mishra & Sunil Saroj & Shahidur Rashid, 2022. "Government transfers, COVID‐19 shock, and food insecurity: Evidence from rural households in India," Agribusiness, John Wiley & Sons, Ltd., vol. 38(3), pages 636-659, July.
    10. Kishore, Avinash & Singh, Vartika, 2021. "Seeds, Water, and Markets to Increase Wheat Productivity in Bihar, India," 2021 Conference, August 17-31, 2021, Virtual 315022, International Association of Agricultural Economists.
    11. Hongyun Zheng & Wanglin Ma & Gucheng Li, 2021. "Adoption of organic soil amendments and its impact on farm performance: evidence from wheat farmers in China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(2), pages 367-390, April.
    12. Wanglin Ma & Huanguang Qiu & Dil Bahadur Rahut, 2023. "Rural development in the digital age: Does information and communication technology adoption contribute to credit access and income growth in rural China?," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1421-1444, August.
    13. Anjani Kumar & Vinay K. Sonkar & K. S. Aditya, 2023. "Assessing the Impact of Lending Through Kisan Credit Cards in Rural India: Evidence from Eastern India," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 35(3), pages 602-622, June.
    14. Bedru B. Balana & Crystal N. Aghadi & Adebayo I. Ogunniyi, 2022. "Improving livelihoods through postharvest loss management: evidence from Nigeria," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(1), pages 249-265, February.
    15. Ma, Wanglin & Qiu, Huanguang & Fan, Yubing & Zhou, Xiaoshi, 2020. "The joint effects of ICT adoption and access to credit on household income in China," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304431, Agricultural and Applied Economics Association.
    16. Cariappa, A. G. Adeeth & Sendhil, R, 2021. "Does Institutional Credit Induce on-Farm Investments? Evidence from India," 2021 Conference, August 17-31, 2021, Virtual 315221, International Association of Agricultural Economists.
    17. Huong Hoang-Thi & Shah Fahad & Ashfaq Ahmad Shah & Tung Nguyen-Huu-Minh & Tuan Nguyen-Anh & Song Nguyen-Van & Nguyen To-The & Huong Nguyen-Thi-Lan, 2023. "Evaluating the farmers’ adoption behavior of water conservation in mountainous region Vietnam: extrinsic and intrinsic determinants," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 115(2), pages 1313-1330, January.

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