IDEAS home Printed from https://ideas.repec.org/a/gam/jagris/v13y2023i5p1018-d1140878.html
   My bibliography  Save this article

Effect of Micro-Credit for Poverty Alleviation on Income Growth and Poverty Alleviation—Empirical Evidence from Rural Areas in Hebei, China

Author

Listed:
  • Shuangming Yin

    (School of Economics, Shandong University of Finance and Economics, Jinan 250014, China)

  • Xiaojuan Chen

    (School of Economics, Shandong University of Finance and Economics, Jinan 250014, China)

  • Xiangyu Zhou

    (School of Economics, Shandong University of Finance and Economics, Jinan 250014, China)

  • Chao Chen

    (School of Economics, Shandong University of Finance and Economics, Jinan 250014, China)

  • Jianxu Liu

    (School of Economics, Shandong University of Finance and Economics, Jinan 250014, China)

Abstract

Micro-credit for poverty alleviation is an important financial measure of targeted poverty reduction and rural revitalization in China. This paper employs the OLS model and Logit model to empirically test the effect of micro-credit for poverty alleviation on the income level and stability of income growth of farmers based on the field survey data of 458 registered poverty-stricken farmer households in Fuping County and Quyang County of Hebei Province. The results suggest that micro-credit for poverty alleviation can increase farmers’ income, stabilize the growth of their income, and exert significant short-term and long-term effects on income growth and poverty alleviation. The specialized farmer cooperatives, the scale of production and operation, the proportion of family labor force, and the education level of the head of the farmer’s household exert a significantly positive effect on the farmers’ income and the stable growth of their income. There is a significant interaction between micro-credit for poverty alleviation and specialized farmer cooperatives. The physical conditions of family members exert a negative effect on the stable growth of their income, and other financing channels have no significant effect.

Suggested Citation

  • Shuangming Yin & Xiaojuan Chen & Xiangyu Zhou & Chao Chen & Jianxu Liu, 2023. "Effect of Micro-Credit for Poverty Alleviation on Income Growth and Poverty Alleviation—Empirical Evidence from Rural Areas in Hebei, China," Agriculture, MDPI, vol. 13(5), pages 1-17, May.
    • Handle: RePEc:gam:jagris:v:13:y:2023:i:5:p:1018-:d:1140878
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2077-0472/13/5/1018/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2077-0472/13/5/1018/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Craig P. Aubuchon & Rajdeep Sengupta, 2008. "The microfinance revolution: an overview," Review, Federal Reserve Bank of St. Louis, vol. 90(Jan), pages 9-30.
    2. Imran Matin & David Hulme & Stuart Rutherford, 2002. "Finance for the poor: from microcredit to microfinancial services," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(2), pages 273-294.
    3. Alessandro Tarozzi & Jaikishan Desai & Kristin Johnson, 2015. "The Impacts of Microcredit: Evidence from Ethiopia," American Economic Journal: Applied Economics, American Economic Association, vol. 7(1), pages 54-89, January.
    4. repec:bla:devpol:v:23:y:2005:i:6:p:703-723 is not listed on IDEAS
    5. Shahidur R. Khandker & Gayatri B. Koolwal, 2016. "How has microcredit supported agriculture? Evidence using panel data from Bangladesh," Agricultural Economics, International Association of Agricultural Economists, vol. 47(2), pages 157-168, March.
    6. Matthieu Chemin, 2008. "The Benefits and Costs of Microfinance: Evidence from Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 44(4), pages 463-484, April.
    7. Dao, Nguyen Dinh, 2020. "Does the microcredit intervention change the life of the low- and middle-income households in rural Vietnam? Evidence from panel data," World Development Perspectives, Elsevier, vol. 20(C).
    8. Manuela Angelucci & Dean Karlan & Jonathan Zinman, 2015. "Microcredit Impacts: Evidence from a Randomized Microcredit Program Placement Experiment by Compartamos Banco," American Economic Journal: Applied Economics, American Economic Association, vol. 7(1), pages 151-182, January.
    9. Tahmasebi, Asghar & Askaribezayeh, Fatemeh, 2021. "Microfinance and social capital formation- a social network analysis approach," Socio-Economic Planning Sciences, Elsevier, vol. 76(C).
    10. Godoy, Ricardo & O'neill, Kathleen & Groff, Stephen & Kostishack, Peter & Cubas, Adoni & Demmer, Josephien & Mcsweeney, Kendra & Overman, Johannes & Wilkie, David & Brokaw, Nicholas & Martinez, Marque, 1997. "Household determinants of deforestation by amerindians in honduras," World Development, Elsevier, vol. 25(6), pages 977-987, June.
    11. Aiwei Li & Shuyuan Gao & Miaoni Gao & Xueqing Wang & Hongling Zhang & Tong Jiang & Jing Yang, 2022. "Spatiotemporal Evolution and Socioeconomic Impacts of Rainstorms and Droughts in Contiguous Poverty-Stricken Areas of China," Sustainability, MDPI, vol. 14(16), pages 1-14, August.
    12. repec:pri:rpdevs:morduch_microfinance_poor is not listed on IDEAS
    13. J. Copestake & S. Bhalotra & S. Johnson, 2001. "Assessing the Impact of Microcredit: A Zambian Case Study," Journal of Development Studies, Taylor & Francis Journals, vol. 37(4), pages 81-100.
    14. Songmao Wang & Yingzhi Guo & Zhaoli He, 2023. "Analysis on the Measurement and Dynamic Evolution of Multidimensional Return to Poverty in Chinese Rural Households," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 165(1), pages 31-52, January.
    15. Javed Hussain & Samia Mahmood & Jonathan Scott, 2019. "Gender, Microcredit and Poverty Alleviation in a Developing Country: The Case of Women Entrepreneurs in Pakistan," Journal of International Development, John Wiley & Sons, Ltd., vol. 31(3), pages 247-270, April.
    16. Mark M. Pitt & Shahidur R. Khandker, 1998. "The Impact of Group-Based Credit Programs on Poor Households in Bangladesh: Does the Gender of Participants Matter?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 958-996, October.
    17. Robert Lensink & Thi Thu Tra Pham, 2012. "The impact of microcredit on self‐employment profits in Vietnam," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 20(1), pages 73-111, January.
    18. Shahidur R. Khandker, 2005. "Microfinance and Poverty: Evidence Using Panel Data from Bangladesh," The World Bank Economic Review, World Bank, vol. 19(2), pages 263-286.
    19. Paul Mpuga, 2010. "Constraints in Access to and Demand for Rural Credit: Evidence from Uganda," African Development Review, African Development Bank, vol. 22(1), pages 115-148.
    20. Jinmian Han & Jiaqi Wang & Xiaoqiang Ma, 2019. "Effects of Farmers’ Participation in Inclusive Finance on Their Vulnerability to Poverty: Evidence from Qinba Poverty-Stricken Area in China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(5), pages 998-1013, April.
    21. repec:asi:ajosrd:2012:p:189-200 is not listed on IDEAS
    22. Yongqiang Xu & Lim Thien Sang & Kun Wang & Efthymios G. Tsionas, 2021. "Prediction of Farmers’ Income in Hebei Province Based on the Fractional Grey Model (1,1)," Journal of Mathematics, Hindawi, vol. 2021, pages 1-10, November.
    23. Francis Menjo Baye, 2013. "Household Economic Well-being: Response to Micro-Credit Access in Cameroon," African Development Review, African Development Bank, vol. 25(4), pages 447-467.
    24. Thanh, Pham Tien & Saito, Katsuhiro & Duong, Pham Bao, 2019. "Impact of microcredit on rural household welfare and economic growth in Vietnam," Journal of Policy Modeling, Elsevier, vol. 41(1), pages 120-139.
    25. Oliphant, Wesley & Ma, Hong, 2021. "Applying Behavioral Economics to microcredit in China’s rural areas," Journal of Behavioral and Experimental Finance, Elsevier, vol. 31(C).
    26. M. A Akudugu, 2012. "Estimation of the Determinants of Credit Demand by Farmers and Supply by Rural Banks in Ghana’s Upper East Region," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society, vol. 2(2), pages 189-200.
    27. Jonathan Morduch, 1998. "Does Microfinance Really Help the Poor? New Evidence from Flagship Programs in Bangladesh," Working Papers 198, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    28. Mengdi Wang & Xiaobing Peng, 2023. "How to Develop Sustainably after Poverty Alleviation in Poverty-Stricken Areas under Paired Assistance: A Quantitative Assessment Framework Based on System Dynamics Model," Sustainability, MDPI, vol. 15(6), pages 1-17, March.
    29. Renyi Yang & Zisheng Yang, 2022. "Can the Sorghum Planting Industry in Less-Favoured Areas Promote the Income Increase of Farmers? An Empirical Study of Survey Data from 901 Samples in Luquan County," Agriculture, MDPI, vol. 12(12), pages 1-26, December.
    30. P. Mosley, 2001. "Microfinance and Poverty in Bolivia," Journal of Development Studies, Taylor & Francis Journals, vol. 37(4), pages 101-132.
    31. Dinh Khoi Phan & Christopher Gan & Gilbert V. Nartea & David A. Cohen, 2014. "The impact of microcredit on rural households in the Mekong River Delta of Vietnam," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 19(4), pages 558-578, October.
    32. Morduch, Jonathan, 2020. "Why RCTs failed to answer the biggest questions about microcredit impact," World Development, Elsevier, vol. 127(C).
    33. Mosley, Paul & Hulme, David, 1998. "Microenterprise finance: Is there a conflict between growth and poverty alleviation?," World Development, Elsevier, vol. 26(5), pages 783-790, May.
    34. Akudugu, M. A., 2012. "Estimation of the Determinants of Credit Demand by Farmers and Supply by Rural Banks in Ghana’s Upper East Region," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 2(02), pages 1-13, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mathilde Maîtrot & Miguel Niño-Zarazúa, 2017. "Poverty and wellbeing impacts of microfinance: What do we know?," WIDER Working Paper Series wp-2017-190, World Institute for Development Economic Research (UNU-WIDER).
    2. Mathilde Maîtrot & Miguel Niño-Zarazúa, 2017. "Poverty and wellbeing impacts of microfinance: What do we know?," WIDER Working Paper Series 190, World Institute for Development Economic Research (UNU-WIDER).
    3. Hisaki KONO & Kazushi TAKAHASHI, 2010. "Microfinance Revolution: Its Effects, Innovations, And Challenges," The Developing Economies, Institute of Developing Economies, vol. 48(1), pages 15-73, March.
    4. Gutiérrez-Nieto, Begoña & Serrano-Cinca, Carlos, 2019. "20 years of research in microfinance: An information management approach," International Journal of Information Management, Elsevier, vol. 47(C), pages 183-197.
    5. Dao, Nguyen Dinh, 2020. "Does the microcredit intervention change the life of the low- and middle-income households in rural Vietnam? Evidence from panel data," World Development Perspectives, Elsevier, vol. 20(C).
    6. Namayengo., Faith & van Ophem, Johan A.C. & Antonides, Gerrit, 2016. "Women And Microcredit In Rural Agrarian Households Of Uganda: Match Or Mismatch Between Lender And Borrower?," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 10(2-3), pages 1-12, October.
    7. Amendola,Alessandra & Boccia,Marinella & Mele,Gianluca & Sensini,Luca, 2016. "Financial access and household welfare : evidence from Mauritania," Policy Research Working Paper Series 7533, The World Bank.
    8. Islam, Asadul, 2015. "Heterogeneous effects of microcredit: Evidence from large-scale programs in Bangladesh," Journal of Asian Economics, Elsevier, vol. 37(C), pages 48-58.
    9. Vu Ha Thu & Daisaku Goto, 2020. "Does Microfinance Improve the Household Welfare of Ethnic Minorities? Evidence from Bac Kan Province, Vietnam," Progress in Development Studies, , vol. 20(1), pages 65-83, January.
    10. Akudugu, M. A., 2018. "The Relative Importance of Credit in Agricultural Production in Ghana: Implications for Policy and Practice," 2018 Conference (2nd), August 8-11, Kumasi, Ghana 277794, Ghana Association of Agricultural Economists.
    11. Gunhild Berg, 2010. "Evaluating The Impacts Of Microsaving: The Case Of Sewa Bank In India," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 35(1), pages 75-96, March.
    12. Pablo Cotler & Christopher Woodruff, 2008. "The Impact of Short-Term Credit on Microenterprises: Evidence from the Fincomun-Bimbo Program in Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 56(4), pages 829-849, July.
    13. Simon Zaby, 2019. "Science Mapping of the Global Knowledge Base on Microfinance: Influential Authors and Documents, 1989–2019," Sustainability, MDPI, vol. 11(14), pages 1-21, July.
    14. Janda, Karel & Zetek, Pavel, 2014. "Mikrofinanční Revoluce: Aktuální Kontroverze A Výzvy [Microfinance Revolution: Recent Controversies And Challenges]," MPRA Paper 54098, University Library of Munich, Germany.
    15. Kazushi TAKAHASHI & Takayuki HIGASHIKATA & Kazunari TSUKADA, 2010. "The Short‐Term Poverty Impact Of Small‐Scale, Collateral‐Free Microcredit In Indonesia: A Matching Estimator Approach," The Developing Economies, Institute of Developing Economies, vol. 48(1), pages 128-155, March.
    16. João Paulo Coelho Ribeiro & Fábio Duarte & Ana Paula Matias Gama, 2022. "Does microfinance foster the development of its clients? A bibliometric analysis and systematic literature review," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-35, December.
    17. Janda, Karel & Zetek, Pavel, 2014. "Survey of Microfinance Controversies and Challenges," MPRA Paper 56657, University Library of Munich, Germany.
    18. Oriana Bandiera & Robin Burgess & Erika Deserranno & Ricardo Morel & Imran Rasul & Munshi Sulaiman & Jack Thiemel, 2022. "Microfinance and Diversification," Economica, London School of Economics and Political Science, vol. 89(S1), pages 239-275, June.
    19. Karel Janda & Pavel Zetek, 2015. "Mikrofinanční revoluce: kontroverze a výzvy [Microfinance Revolution: Controversies and Challenges]," Politická ekonomie, Prague University of Economics and Business, vol. 2015(1), pages 108-130.
    20. Dilruba Khanam & Muhammad Mohiuddin & Asadul Hoque & Olaf Weber, 2018. "Financing micro-entrepreneurs for poverty alleviation: a performance analysis of microfinance services offered by BRAC, ASA, and Proshika from Bangladesh," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 8(1), pages 1-17, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jagris:v:13:y:2023:i:5:p:1018-:d:1140878. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.