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Rural finance and agricultural technology adoption in Ethiopia: Does institutional design matter?:

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  • Abate, Gashaw Tadesse
  • Rashid, Shahidur
  • Borzaga, Carlos
  • Getnet, Kindie

Abstract

Financial cooperatives and microfinance institutions (MFIs) are the two major sources of rural finance in Ethiopia. Whereas MFIs are relatively new, financial cooperatives have existed for centuries in various forms. The coexistence of two different institutions serving the same group of people, and delivering the same financial services, raises several policy questions. Those questions have become particularly relevant, as the government has embarked on developing a new strategy for improving rural financial services delivery. This study is expected to serve as an input to that policy discussion. Using a unique household survey dataset and the propensity-score-matching technique, we examine the impacts of the two financial service providers on agricultural technology adoption. The results suggest that access to institutional finance has significant positive impacts on both the adoption and extent of technology use.

Suggested Citation

  • Abate, Gashaw Tadesse & Rashid, Shahidur & Borzaga, Carlos & Getnet, Kindie, 2015. "Rural finance and agricultural technology adoption in Ethiopia: Does institutional design matter?:," IFPRI discussion papers 1422, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:1422
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    Cited by:

    1. Chowdhury, Shyamal & Smits, Joeri & Sun, Qigang, 2020. "Does Access to Microcredit Lead to Technology Adoption by Smallholder Farmers? Experimental Evidence from Rural Bangladesh," 2020 Conference (64th), February 12-14, 2020, Perth, Western Australia 305247, Australian Agricultural and Resource Economics Society.
    2. Lota Tamini & Ibrahima Bocoum & Ghislain Auger & Kotchikpa Gabriel Lawin & Arahama Traoré, 2019. "Enhanced Microfinance Services and Agricultural Best Management Practices: What Benefits for Smallholders Farmers? An Evidence from Burkina Faso," CIRANO Working Papers 2019s-11, CIRANO.
    3. Merrey, D. J. & Lefore, Nicole, 2018. "Improving the availability and effectiveness of rural and “Micro” finance for small-scale irrigation in Sub-Saharan Africa: a review of lessons learned," IWMI Working Papers H049027, International Water Management Institute.
    4. Shukkri AHMED & Craig MCINTOSH & Alexandros SARRIS, 2017. "The Impact of Commercial Rainfall Index Insurance: Experimental Evidence from Ethiopia," Working Papers 4288, FERDI.
    5. Shukkri AHMED & Craig MCINTOSH & Alexandros SARRIS, 2017. "The Impact of Commercial Rainfall Index Insurance: Experimental Evidence from Ethiopia," Working Papers 4289, FERDI.

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    Keywords

    Finance; Agricultural technologies; technology adoption; Rural finance; Microfinance; rural areas; Financial institutions; Cooperative banks;
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