IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i2p1297-d1030890.html
   My bibliography  Save this article

The Credit Accessibility and Adoption of New Agricultural Inputs Nexus: Assessing the Role of Financial Institutions in Sudan

Author

Listed:
  • Yasir A. Nasereldin

    (College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, China
    Department of Agricultural Economics & Agribusiness, Faculty of Natural Resources & Environmental Studies, Kordofan University, EI Obeid 51111, Sudan)

  • Abbas Ali Chandio

    (College of Economics, Sichuan Agricultural University, Chengdu 611130, China)

  • Maurice Osewe

    (College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, China)

  • Muhammad Abdullah

    (College of Public Administration, Nanjing Agricultural University, Nanjing 210095, China)

  • Yueqing Ji

    (College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, China)

Abstract

Many studies have shown that credit is crucial for the adoption of new agricultural inputs and technologies in developing countries. Hence, the issue about how financial institutions select farmer applicants to give loans to is very important. We used primary data from 401 rural households to show what kinds of farmers can get credit from banks in Sudan. The probit model is used to examine the factors that determine both farmers’ access to credit and the adoption of new inputs, and to show the nexus of credit accessibility and the adoption of new input through other factors. The main findings show that farming experience, the number of close friends, hire labor, cultivated land, irrigation, and extension services, are the factors that significantly determine farmers’ credit accessibility from banks. Some of these determinants, such as cultivated land and irrigation, also influence the adoption of new inputs. There exists a strong correlation between credit accessibility from banks and the possibility of using new input. In addition, an IV probit model shows that farmers’ use of chemical fertilizers and improved varieties directly influences the loan decision from banks. This means farmers’ credit demand induced by the chance of using new input actually has been satisfied by the banks in Sudan. The comparison results show that, for the subsample, for the Farmer’s Commercial Bank (FCB) the nexus between credit accessibility and the adoption of new inputs is stronger than that of the Agricultural Bank of Sudan (ABS). Therefore, this study recommended that the Sudan government should choose FCB as the lender of subsidized credit to increase the banks’ contribution to the development of plant production.

Suggested Citation

  • Yasir A. Nasereldin & Abbas Ali Chandio & Maurice Osewe & Muhammad Abdullah & Yueqing Ji, 2023. "The Credit Accessibility and Adoption of New Agricultural Inputs Nexus: Assessing the Role of Financial Institutions in Sudan," Sustainability, MDPI, vol. 15(2), pages 1-18, January.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:2:p:1297-:d:1030890
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/2/1297/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/2/1297/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Timothy N. Njeru & Yukichi Mano & Keijiro Otsuka, 2016. "Role of Access to Credit in Rice Production in Sub-Saharan Africa: The Case of Mwea Irrigation Scheme in Kenya," Journal of African Economies, Centre for the Study of African Economies, vol. 25(2), pages 300-321.
    2. Obisesan, Adekemi A. & Amos, Taiwo T. & Akinlade, Roseline J., 2016. "Causal Effect Of Credit And Technology Adoption On Farm Output And Income: The Case Of Cassava Farmers In Southwest Nigeria," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246443, African Association of Agricultural Economists (AAAE).
    3. Abbas Ali Chandio & Yuansheng Jiang & Abdul Rehman & Waqar Akram, 2021. "Does Formal Credit Enhance Sugarcane Productivity? A Farm-Level Study of Sindh, Pakistan," SAGE Open, , vol. 11(1), pages 21582440209, January.
    4. Maurice Ogada & Germano Mwabu & Diana Muchai, 2014. "Farm technology adoption in Kenya: a simultaneous estimation of inorganic fertilizer and improved maize variety adoption decisions," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 2(1), pages 1-18, December.
    5. Franklin Simtowe & Solomon Asfaw & Tsedeke Abate, 2016. "Determinants of agricultural technology adoption under partial population awareness: the case of pigeonpea in Malawi," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 4(1), pages 1-21, December.
    6. Stijn Claessens, 2006. "Access to Financial Services: A Review of the Issues and Public Policy Objectives," The World Bank Research Observer, World Bank, vol. 21(2), pages 207-240.
    7. Catherine Guirkinger & Stephen R. Boucher, 2008. "Credit constraints and productivity in Peruvian agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 39(3), pages 295-308, November.
    8. Aleem, Irfan, 1990. "Imperfect Information, Screening, and the Costs of Informal Lending: A Study of a Rural Credit Market in Pakistan," The World Bank Economic Review, World Bank, vol. 4(3), pages 329-349, September.
    9. Ouma, James Okuro & De Groote, Hugo & Owuor, George, 2006. "Determinants of Improved Maize Seed and Fertilizer Use in Kenya: Policy Implications," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25433, International Association of Agricultural Economists.
    10. Nusrat Abedin Jimi & Plamen V. Nikolov & Mohammad Abdul Malek & Subal Kumbhakar, 2019. "The effects of access to credit on productivity: separating technological changes from changes in technical efficiency," Journal of Productivity Analysis, Springer, vol. 52(1), pages 37-55, December.
    11. Abebe, Gumataw K. & Bijman, Jos & Pascucci, Stefano & Omta, Onno, 2013. "Adoption of improved potato varieties in Ethiopia: The role of agricultural knowledge and innovation system and smallholder farmers’ quality assessment," Agricultural Systems, Elsevier, vol. 122(C), pages 22-32.
    12. Akhter Ali & Dil Bahadur Rahut & Muhammad Imtiaz, 2019. "Affordability Linked with Subsidy: Impact of Fertilizers Subsidy on Household Welfare in Pakistan," Sustainability, MDPI, vol. 11(19), pages 1-12, September.
    13. Simtowe, Franklin & Kassie, Menale & Diagne, Aliou & Asfaw, Solomon & Shiferaw, Bekele & Silim, Said & Muange, Elijah, 2011. "Determinants of Agricultural Technology Adoption: The Case of Improved Pigeonpea Varieties in Tanzania," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 50(4), pages 1-21.
    14. Feleke, Shiferaw & Zegeye, Tesfaye, 2006. "Adoption of improved maize varieties in Southern Ethiopia: Factors and strategy options," Food Policy, Elsevier, vol. 31(5), pages 442-457, October.
    15. Conning, Jonathan & Udry, Christopher, 2007. "Rural Financial Markets in Developing Countries," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 3, chapter 56, pages 2857-2908, Elsevier.
    16. Nakano, Yuko & Magezi, Eustadius F., 2020. "The impact of microcredit on agricultural technology adoption and productivity: Evidence from randomized control trial in Tanzania," World Development, Elsevier, vol. 133(C).
    17. Hailu, Berihun Kassa & Abrha, Bihon Kassa & Weldegiorgis, Kibrom Aregawi, 2014. "Adoption and Impact of Agricultural Technologies on Farm Income: Evidence from Southern Tigray, Northern Ethiopia," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 2(4), pages 1-16, October.
    18. Andre Croppenstedt & Mulat Demeke & Meloria M. Meschi, 2003. "Technology Adoption in the Presence of Constraints: the Case of Fertilizer Demand in Ethiopia," Review of Development Economics, Wiley Blackwell, vol. 7(1), pages 58-70, February.
    19. Awotide, B.A. & Abdoulaye, Tahirou & Alene, Arega & Manyong, Victor M., 2015. "Impact of Access to Credit on Agricultural Productivity: Evidence from Smallholder Cassava Farmers in Nigeria," 2015 Conference, August 9-14, 2015, Milan, Italy 210969, International Association of Agricultural Economists.
    20. Keijiro Otsuka & Donald F. Larson (ed.), 2016. "In Pursuit of an African Green Revolution," Natural Resource Management and Policy, Springer, edition 1, number 978-4-431-55693-0, March.
    21. Kassie, Menale & Shiferaw, Bekele & Muricho, Geoffrey, 2011. "Agricultural Technology, Crop Income, and Poverty Alleviation in Uganda," World Development, Elsevier, vol. 39(10), pages 1784-1795.
    22. Ta Nhat Linh & Hoang Thanh Long & Le Van Chi & Le Thanh Tam & Philippe Lebailly, 2019. "Access to Rural Credit Markets in Developing Countries, the Case of Vietnam: A Literature Review," Sustainability, MDPI, vol. 11(5), pages 1-18, March.
    23. Elahi, Ehsan & Abid, Muhammad & Zhang, Liqin & ul Haq, Shams & Sahito, Jam Ghulam Murtaza, 2018. "Agricultural advisory and financial services; farm level access, outreach and impact in a mixed cropping district of Punjab, Pakistan," Land Use Policy, Elsevier, vol. 71(C), pages 249-260.
    24. Ingrid Rhinehart & C. Michael Deom, 2007. "Peanut Research and Poverty Reduction: Impacts of Variety Improvement to Control Peanut Viruses in Uganda," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 448-460.
    25. Shahab E. Saqib & Mokbul Morshed Ahmad & Sanaullah Panezai, 2016. "Landholding size and farmers’ access to credit and its utilisation in Pakistan," Development in Practice, Taylor & Francis Journals, vol. 26(8), pages 1060-1071, November.
    26. Abdul-Rahaman, Awal & Issahaku, Gazali & Zereyesus, Yacob A., 2021. "Improved rice variety adoption and farm production efficiency: Accounting for unobservable selection bias and technology gaps among smallholder farmers in Ghana," Technology in Society, Elsevier, vol. 64(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mumah, Edwin & Chen, Yangfen & Hong, Yu & Okello, Dickson, 2024. "Machinery Adoption and Its Effect on Maize Productivity among Smallholder Farmers in Western Kenya: Evidence from the Chisel Harrow Tillage Practice," Research on World Agricultural Economy, Nan Yang Academy of Sciences Pte Ltd (NASS), vol. 5(1), January.

    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. Nakano, Yuko & Magezi, Eustadius F., 2020. "The impact of microcredit on agricultural technology adoption and productivity: Evidence from randomized control trial in Tanzania," World Development, Elsevier, vol. 133(C).
    2. Ta Nhat Linh & Hoang Thanh Long & Le Van Chi & Le Thanh Tam & Philippe Lebailly, 2019. "Access to Rural Credit Markets in Developing Countries, the Case of Vietnam: A Literature Review," Sustainability, MDPI, vol. 11(5), pages 1-18, March.
    3. Unal Seven & Semih Tumen, 2020. "Agricultural Credits And Agricultural Productivity: Cross-Country Evidence," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(supp01), pages 161-183, December.
    4. Porgo, Mohamed & Kuwornu, John K.M. & Zahonogo, Pam & Jatoe, John Baptist D. & Egyir, Irene S., 2018. "Credit constraints and cropland allocation decisions in rural Burkina Faso," Land Use Policy, Elsevier, vol. 70(C), pages 666-674.
    5. Balana, Bedru & Oyeyemi, Motunrayo, 2021. "Credit Constraints and Adoption of Agricultural Technologies in Developing Countries? Evidence from Nigeria," 2021 Conference, August 17-31, 2021, Virtual 315347, International Association of Agricultural Economists.
    6. Musa Hasen Ahmed & Kassahun Mamo Geleta & Aemro Tazeze & Hiwot Mekonnen Mesfin & Eden Andualem Tilahun, 2017. "Cropping systems diversification, improved seed, manure and inorganic fertilizer adoption by maize producers of eastern Ethiopia," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 6(1), pages 1-16, December.
    7. Yukichi Y. & Mano Yukichi Y. & Takahashi Kazushi & Otsuka Keijiro, 2017. "Contract Farming, Farm Mechanization, and Agricultural Intensification: The Case of Rice Farming in Cote d’Ivoire," Working Papers 157, JICA Research Institute.
    8. Alem, Mauro & Jorge Elias, Julio, 2018. "Allocating production risks through credit cum insurance contracts: the design and implementation of a fund for small cotton growers to access market finance," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(2), March.
    9. Felister Y. Tibamanya & Mursali A. Milanzi & Arne Henningsen, 2021. "Drivers of and Barriers to Adoption of Improved Sun- flower Varieties amongst Smallholder Farmers in Singida, Tanzania: the Double-Hurdle Approach," IFRO Working Paper 2021/03, University of Copenhagen, Department of Food and Resource Economics.
    10. Balana, B. B. & Mekonnen, D. & Haile, B. & Hagos, Fitsum & Yimam, S. & Ringler, C., 2022. "Demand and supply constraints of credit in smallholder farming: evidence from Ethiopia and Tanzania," Papers published in Journals (Open Access), International Water Management Institute, pages 159:106033..
    11. Aslihan Arslan & Kristin Floress & Christine Lamanna & Leslie Lipper & Solomon Asfaw & Todd Rosenstock, 2020. "IFAD RESEARCH SERIES 63 - The adoption of improved agricultural technologies - A meta-analysis for Africa," IFAD Research Series 304758, International Fund for Agricultural Development (IFAD).
    12. Keijiro Otsuka & Yukichi Mano & Kazushi Takahashi, 2023. "The Rice Green Revolution in Sub-Saharan Africa: Issues and Opportunities," Natural Resource Management and Policy, in: Keijiro Otsuka & Yukichi Mano & Kazushi Takahashi (ed.), Rice Green Revolution in Sub-Saharan Africa, chapter 0, pages 3-24, Springer.
    13. Chitralada Chaiya & Sikandar Sikandar & Pichate Pinthong & Shahab E. Saqib & Niaz Ali, 2023. "The Impact of Formal Agricultural Credit on Farm Productivity and Its Utilization in Khyber Pakhtunkhwa, Pakistan," Sustainability, MDPI, vol. 15(2), pages 1-14, January.
    14. Mukasa Adamon N. & Anthony M. Simpasa & Adeleke Oluwole Salami, 2017. "Working Paper 247 - Credit constraints and farm productivity: Micro-level evidence from smallholder farmers in Ethiopia," Working Paper Series 2356, African Development Bank.
    15. Ayalew Ali, Daniel & Deininger, Klaus, 2012. "Causes and implications of credit rationing in rural Ethiopia : the importance of spatial variation," Policy Research Working Paper Series 6096, The World Bank.
    16. N’Banan Ouattara & Xueping Xiong & Moussa Bakayoko & Trazié Bertrand Athanase Youan Bi & Dessalegn Anshiso Sedebo & Zié Ballo, 2022. "What Influences Rice Farmers’ Choices of Credit Sources in Côte d’Ivoire? An Econometric Analysis using the Multinomial Conditional Logit Model," Progress in Development Studies, , vol. 22(2), pages 149-173, April.
    17. 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.
    18. Kislat, Carmen & Menkhoff, Lukas & Neuberger, Doris, 2013. "The use of collateral in formal and informal lending," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79765, Verein für Socialpolitik / German Economic Association.
    19. Aparicio, Gabriela & Bobic, Vida & De Olloqui, Fernando & Carmen, María & Diez, María Carmen Fernández & Gerardino, Maria Paula & Mitnik, Oscar A. & Macedo, Sebastian Vargas, 2021. "Liquidity or Capital? The Impacts of Easing Credit Constraints in Rural Mexico," IZA Discussion Papers 14477, Institute of Labor Economics (IZA).
    20. Jianmei ZHAO & Jun ZHANG & Peter J. BARRY, 2014. "Do formal credit constraints affect the rural household consumption in China?," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 60(10), pages 458-468.

    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:jsusta:v:15:y:2023:i:2:p:1297-:d:1030890. 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.