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Financing agricultural inputs in Northern Togo through an inventory credit system: an economic analysis of institutional response

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  • Konlambigue, Abdou

Abstract

Agricultural intensification is widely seen as a condition sine-qua-non for enhanced food security and as a major driver for overall economic growth in sub-Saharan Africa (SSA). In this process, the financial system has an important role to play, especially to finance agricultural inputs. However in SSA, the financial institutions initiated by governments and donors have in general not lived up to the expectations, in particular not for the agricultural sector, because of inappropriate design and weaknesses in implementation. Even the microfinance institutions which were supposed to support the small-scale farmers have deflected for their goals due to the risks that the agricultural sector represents. To date, the economic research tends to concentrate on the mechanisms that secure the credit of microfinance institutions. However, the effective implementation of new mechanisms to secure credit appears more difficult than foreseen, as the decision making processes involved are complex and constrained by the lack of information. This paper argues that sustainable agricultural financing needs alternative schemes that secure both the credit of financial institutions and farmers’ income. It will also be shown how the new institutional economics perspective can be used to analyze and guide decision-making with respect to alternative schemes for agricultural financing. This paper which is based on quantitative and qualitative data presents the case of the inventory credit scheme on maize to facilitate access to agricultural inputs in Savannah region of Togo. In conclusion, some research areas will be indicated to improve our understanding of the inventory credit system.

Suggested Citation

  • Konlambigue, Abdou, 2008. "Financing agricultural inputs in Northern Togo through an inventory credit system: an economic analysis of institutional response," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52100, African Association of Agricultural Economists (AAAE).
    • Handle: RePEc:ags:aaae07:52100
    DOI: 10.22004/ag.econ.52100
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    References listed on IDEAS

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    1. Kherallah, Mylene & Kirsten, Johann F, 2002. "The New Institutional Economics: Applications For Agricultural Policy Research In Developing Countries," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 41(2).
    2. Poulton, Colin & Dorward, Andrew & Jowett, A. & Peacock, C. & Urey, Ian, 2004. "Priorities and Preconditions for Successful Investment in Smallholder Agriculture in Sub-Saharan Africa," 2004 Inaugural Symposium, December 6-8, 2004, Nairobi, Kenya 9516, African Association of Agricultural Economists (AAAE).
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