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Does the structure of credit markets affect agricultural development in West African countries?

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  • Kassouri, Yacouba
  • Kacou, Kacou Yves Thierry

Abstract

Growing evidence suggests that credit constraint or the inability of rural farmers to access financial instruments remains a binding constraint to enhanced productivity in sub-Saharan Africa. We complement this evidence by exploring the contribution of credits to agricultural development with a particular emphasis on the structure of the credit market, captured by agricultural credits, credit to households and firms engaged in agricultural production, and domestic credit to the private sector. Employing advanced panel data estimation techniques to account for endogeneity and cross-sectional dependence in a panel of West African countries, we find evidence supporting the supply leading and demand following hypotheses. We argue that targeted policy reforms that increase agricultural credits and credit to firms engaged in agricultural activities might be more effective in increasing agricultural productivity.

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  • Kassouri, Yacouba & Kacou, Kacou Yves Thierry, 2022. "Does the structure of credit markets affect agricultural development in West African countries?," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 588-601.
    • Handle: RePEc:eee:ecanpo:v:73:y:2022:i:c:p:588-601
    DOI: 10.1016/j.eap.2021.12.015
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    More about this item

    Keywords

    Credit structure; Agricultural development; Financial inclusion; Agricultural credits; Credit constraints;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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