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Determinants of Farmers’ Access to Credit in the Lao People’s Democratic Republic

Author

Listed:
  • Wongpit, Piya

    (Faculty of Economics and Business Administration National University of Laos, Lao PDR)

  • Sisengnam, Keuangkham

    (Faculty of Economics and Business Administration National University of Laos, Lao PDR)

Abstract

Access to credit for farmers remains a huge challenge in the Lao PDR. This study aims to identify the determinants of farmers’ access to credit. To achieve this goal, this research uses a data set from a country-wide household survey conducted in 2019. The survey took place in six provinces – Attapue, Champasack, Khammouane, Savannakhet, Vientiane, and Xiengkhuang. The current study applies a Logit model to analyze what factors significantly determine farmers’ access to credit. The result shows that the age of the household head is concavely related to credit access. Household size is negatively correlated with access to credit. Household income is found to have an insignificant impact on demand for credit while household saving does have a significant impact. The area of agricultural land does matter for access to credit because it is commonly used as collateral. The incidence of natural disasters in the last three years significantly determines households’ access to credit.

Suggested Citation

  • Wongpit, Piya & Sisengnam, Keuangkham, 2022. "Determinants of Farmers’ Access to Credit in the Lao People’s Democratic Republic," Asian Journal of Applied Economics/ Applied Economics Journal, Kasetsart University, Faculty of Economics, Center for Applied Economic Research, vol. 29(2), pages 124-138, December.
    • Handle: RePEc:ris:apecjn:0076
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    Cited by:

    1. Wongpit, Piya & Syphoxay, Pakaiphone & Sisoumang, Bounthom & Sykhanthong, Sengsulixay, 2023. "Mapping the Coffee Value Chain in Lao PDR: Issues, Insights, and Strategies," Research on World Agricultural Economy, Nan Yang Academy of Sciences Pte Ltd (NASS), vol. 4(4), October.

    More about this item

    Keywords

    access to credit; natural disaster; collateral; logit model *;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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