Determinants of rural credit access decision-making among small-scale rice farmers in Calintaan, Occidental Mindoro, Philippines
Abstract
Informal sources of credit prevail in the rural areas of developing countries mostly cater farm households. Hence, this study was conducted to analyze the determinants of rural credit access decision among small-scale rice farmers in Calintaan, Occidental Mindoro, Philippines using binary logistic regression. A total of 74 randomly selected farm household heads, who have direct supervision in rice farming activities, participated in the study. The results of the binary logistic regression indicated that gender, age and education were the significant determinants of rural credit decision. This research recommends other factors, working sectors and settings for future research.
Keywords
rural credit; rice farmers; credit access; decision; binary logistic regression
References
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Akpan, S. B., Patrick, I. V., Udoka, S. J., Offiong, E. A., & Okon, U. E. (2013). Determinants of credit access and demand among poultry farmers in Akwa Ibom State, Nigeria. Journal of Experimental Agriculture International, 293-307. https://doi.org/10.9734/AJEA/2013/2810
Baffoe, G., & Matsuda, H. (2015). Understanding the determinants of rural credit accessibility: The case of ehiaminchini, Fanteakwa District, Ghana. Journal of sustainable development, 8(6), 183-195. https;//doi.org/10.5539/jsd.v8n6p183
Catelo, S. P., Catelo, M. A. O., & Mina, C. S. (2017). Rural Financial Markets and Credit Delivery System in the Philippines. Microfinance in Asia, 177-226. https://doi.org/10.1142/10233
Chandio, A. A., Jiang, Y., Rehman, A., Twumasi, M. A., Pathan, A. G., & Mohsin, M. (2020). Determinants of demand for credit by smallholder farmers': a farm level analysis based on survey in Sindh, Pakistan. Journal of Asian Business and Economic Studies. https://doi.org/10.1108/JABES-01-2020-0004
Duy, V. Q., D’Haese, M., Lemba, J., & D’Haese, L. (2012). Determinants of household access to formal credit in the rural areas of the Mekong Delta, Vietnam. African and Asian studies, 11(3), 261-287. https://doi.org/10.1163/15692108-12341234
Etonihu, K. I., Rahman, S. A., & Usman, S. (2013). Determinants of access to agricultural credit among crop farmers in a farming community of Nasarawa State, Nigeria. Journal of Development and Agricultural Economics, 5(5), 192-196. https://doi.org/10.5897/JDAE11.126
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Gan, C., Nartea, G. V., & Xia, J. L. (2017). An overview of microfinance. Microfinance in Asia, 1-22.
Gray, A. (2006). Credit accessibility of small-scale farmers and fisherfolk in the Philippines (Doctoral dissertation, Lincoln University).
Hosmer, D. W., Jr., S. A. Lemeshow, and R. X. Sturdivant. 2013. Applied Logistic Regression. 3rd ed. Hoboken, NJ: Wiley.
Jamil, N. I., Baharuddin, F. N., Maknu, T. S. R., Sulaiman, T., Rosle, A. N., & Harun, A. F. (2014). Exploratory factor analysis'.
Kedir, A. (2003). Determinants of access to credit and loan amount: Household-level evidence from urban Ethiopia. https://scholarworks.wmich.edu/africancenter_icad_archive/64/
Kiplimo, Joyce C., Evans Ngenoh, Walter Koech, and Jullius K. Bett. "Determinants of access to credit financial services by smallholder farmers in Kenya." Journal of Development and Agricultural Economics 7, no. 9 (2015): 303-313. https://doi.org/10.5897/JDAE2014.0591
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Linh, T. N., Anh Tuan, D., Thu Trang, P., Trung Lai, H., Do Anh, Q., Viet Cuong, N., & Lebailly, P. (2020). Determinants of Farming Households’ Credit Accessibility in Rural Areas of Vietnam: A Case Study in Haiphong City, Vietnam. Sustainability, 12(11), 4357. https://doi.org/10.3390/su12114357
Llanto, G. M. (1993). Agricultural credit and banking in the Philippines: efficiency and access issues.
Luan, D. X., Bauer, S., & Kuhl, R. (2016). Income Impacts of credit on accessed households in rural Vietnam: Do various credit sources perform differently? AGRIS on-line Papers in Economics and Informatics, 8(665-2016-45113), 57-67. https://doi.org/10.22004/ag.econ.233967
Maharjan, K. L., & Joshi, N. P. (2011). Determinants of household food security in Nepal: A binary logistic regression analysis. Journal of Mountain Science, 8(3), 403-413. https://doi.org/10.1007/s11629-011-2001-2
Malapit, H. J. L. (2012). Are women more likely to be credit constrained? Evidence from low-income urban households in the Philippines. Feminist Economics, 18(3), 81-108. https://doi.org/10.1080/13545701.2012.716161
Mikkel, B., & Finn, T. (2003). Rural Credit in Vietnam. Retrieved from
http://www.econ.ku.dk/wpa/pink/2006/0603.pdf
Mishra, A. K., Khanal, A. R., & Mohanty, S. (2017). Gender differentials in farming efficiency and profits: The case of rice production in the Philippines. Land use policy, 63, 461-469. https://doi.org/10.1016/j.landusepol.2017.01.033
Moahid, M., & Maharjan, K. L. (2020). Factors affecting farmers’ access to formal and informal credit: Evidence from Rural Afghanistan. Sustainability, 12(3), 1268. https://doi.org/10.3390/su12031268
Nagarajan, G., Meyer, R. L., & Hushak, L. J. (1998). Demand For Agricultural Loans: A Theoretical And Econometric Analysis Of The Philippine Credit Market/La Demande De Prêts Agricoles: Une Analyse Théorique Et Économique Du Marché De Crédit Aux Philippines. Savings and Development, 349-363.
Ololade, R. A., & Olagunju, F. I. (2013). Determinants of access to credit among rural farmers in Oyo State, Nigeria. Global Journal of Science Frontier Research Agriculture and Veterinary Sciences, 13(2), 16-22. https://www.researchgate.net/profile/Rachel-Ololade-2/publication/327058053
Omonona, B. T., Lawal, J. O., & Oyinlana, A. O. (2010). Determinants of credit constraint conditions and production efficiency among farming households in Southwestern Nigeria (No. 308-2016-5022, pp. 1-14). https://doi.org/10.22004/ag.econ.95775
Phan, D. K. (2012). An empirical analysis of accessibility and impact of microcredit: the rural credit market in the Mekong River Delta, Vietnam (Doctoral dissertation, Lincoln University). https://hdl.handle.net/10182/4975
Sebopetji, T. O., & Belete, A. (2009). An application of probit analysis to factors affecting small-scale farmers decision to take credit: A case study of the Greater Letaba Local Municipality in South Africa. African journal of agricultural research, 4(8), 718-723. http://www.academicjournals.org/AJAR
Shrestha, N. (2021). Factor Analysis as a Tool for Survey Analysis. American Journal of Applied Mathematics and Statistics, 9(1), 4-11. https://doi.org/10.12691/ajams-9-1-2
Starkweather, J., & Moske, A. K. (2011). Multinomial logistic regression.
Tranmer, M., & Elliot, M. (2008). Binary logistic regression. Cathie Marsh for census and survey research, paper, 20. http://hummedia.manchester.ac.uk/institutes/cmist/archive-publications/working-papers/2008/2008-20-binary-logistic-regression.pdf
Tu, T. T. T., Viet, N. Q., & Loi, H. H. (2015). Determinant of Access to Rural Credit and Its Effect on Living Standard: Case Study about Poor Households in Northwest, Vietnam (Note 1). International Journal of Financial Research, 6(2). http://dx.doi.org/10.5430/ijfr.v6n2p218
Zapata, N. (2006). Credit decision and rationing rules: a study of informal lenders in the Philippines. Philippine Management Review, 13, 117-126. https://ssrn.com/abstract=3075655
Adebayo, O. O., & Adeola, R. G. (2008). Sources and uses of agricultural credit by small scale farmers in Surulere Local Government Area of Oyo State. The Anthropologist, 10(4), 313-314. https://doi.org/10.1080/09720073.2008.11891069
Adegbite, D. A., and O. A. Adeleye. "Determinants of Farmers’ Access to Micro-Credit in Oyo State, Nigeria." Journal of Agricultural Research and Development 10, no. 1 (2011): 55-80. http://ajol.info/index.php/jard/index
Akpan, S. B., Patrick, I. V., Udoka, S. J., Offiong, E. A., & Okon, U. E. (2013). Determinants of credit access and demand among poultry farmers in Akwa Ibom State, Nigeria. Journal of Experimental Agriculture International, 293-307. https://doi.org/10.9734/AJEA/2013/2810
Baffoe, G., & Matsuda, H. (2015). Understanding the determinants of rural credit accessibility: The case of ehiaminchini, Fanteakwa District, Ghana. Journal of sustainable development, 8(6), 183-195. https;//doi.org/10.5539/jsd.v8n6p183
Catelo, S. P., Catelo, M. A. O., & Mina, C. S. (2017). Rural Financial Markets and Credit Delivery System in the Philippines. Microfinance in Asia, 177-226. https://doi.org/10.1142/10233
Chandio, A. A., Jiang, Y., Rehman, A., Twumasi, M. A., Pathan, A. G., & Mohsin, M. (2020). Determinants of demand for credit by smallholder farmers': a farm level analysis based on survey in Sindh, Pakistan. Journal of Asian Business and Economic Studies. https://doi.org/10.1108/JABES-01-2020-0004
Duy, V. Q., D’Haese, M., Lemba, J., & D’Haese, L. (2012). Determinants of household access to formal credit in the rural areas of the Mekong Delta, Vietnam. African and Asian studies, 11(3), 261-287. https://doi.org/10.1163/15692108-12341234
Etonihu, K. I., Rahman, S. A., & Usman, S. (2013). Determinants of access to agricultural credit among crop farmers in a farming community of Nasarawa State, Nigeria. Journal of Development and Agricultural Economics, 5(5), 192-196. https://doi.org/10.5897/JDAE11.126
Floro, S. L. (2019). Informal credit markets and the new institutional economics: The case of Philippine agriculture. Routledge.
Gan, C., Nartea, G. V., & Xia, J. L. (2017). An overview of microfinance. Microfinance in Asia, 1-22.
Gray, A. (2006). Credit accessibility of small-scale farmers and fisherfolk in the Philippines (Doctoral dissertation, Lincoln University).
Hosmer, D. W., Jr., S. A. Lemeshow, and R. X. Sturdivant. 2013. Applied Logistic Regression. 3rd ed. Hoboken, NJ: Wiley.
Jamil, N. I., Baharuddin, F. N., Maknu, T. S. R., Sulaiman, T., Rosle, A. N., & Harun, A. F. (2014). Exploratory factor analysis'.
Kedir, A. (2003). Determinants of access to credit and loan amount: Household-level evidence from urban Ethiopia. https://scholarworks.wmich.edu/africancenter_icad_archive/64/
Kiplimo, Joyce C., Evans Ngenoh, Walter Koech, and Jullius K. Bett. "Determinants of access to credit financial services by smallholder farmers in Kenya." Journal of Development and Agricultural Economics 7, no. 9 (2015): 303-313. https://doi.org/10.5897/JDAE2014.0591
Kumar, A., Singh, D. K., & Kumar, P. (2007). Performance of rural credit and factors affecting the choice of credit sources. Indian Journal of Agricultural Economics, 62(902-2016-67995). https://doi.org/10.22004/ag.econ.96935
Linh, T. N., Anh Tuan, D., Thu Trang, P., Trung Lai, H., Do Anh, Q., Viet Cuong, N., & Lebailly, P. (2020). Determinants of Farming Households’ Credit Accessibility in Rural Areas of Vietnam: A Case Study in Haiphong City, Vietnam. Sustainability, 12(11), 4357. https://doi.org/10.3390/su12114357
Llanto, G. M. (1993). Agricultural credit and banking in the Philippines: efficiency and access issues.
Luan, D. X., Bauer, S., & Kuhl, R. (2016). Income Impacts of credit on accessed households in rural Vietnam: Do various credit sources perform differently? AGRIS on-line Papers in Economics and Informatics, 8(665-2016-45113), 57-67. https://doi.org/10.22004/ag.econ.233967
Maharjan, K. L., & Joshi, N. P. (2011). Determinants of household food security in Nepal: A binary logistic regression analysis. Journal of Mountain Science, 8(3), 403-413. https://doi.org/10.1007/s11629-011-2001-2
Malapit, H. J. L. (2012). Are women more likely to be credit constrained? Evidence from low-income urban households in the Philippines. Feminist Economics, 18(3), 81-108. https://doi.org/10.1080/13545701.2012.716161
Mikkel, B., & Finn, T. (2003). Rural Credit in Vietnam. Retrieved from
http://www.econ.ku.dk/wpa/pink/2006/0603.pdf
Mishra, A. K., Khanal, A. R., & Mohanty, S. (2017). Gender differentials in farming efficiency and profits: The case of rice production in the Philippines. Land use policy, 63, 461-469. https://doi.org/10.1016/j.landusepol.2017.01.033
Moahid, M., & Maharjan, K. L. (2020). Factors affecting farmers’ access to formal and informal credit: Evidence from Rural Afghanistan. Sustainability, 12(3), 1268. https://doi.org/10.3390/su12031268
Nagarajan, G., Meyer, R. L., & Hushak, L. J. (1998). Demand For Agricultural Loans: A Theoretical And Econometric Analysis Of The Philippine Credit Market/La Demande De Prêts Agricoles: Une Analyse Théorique Et Économique Du Marché De Crédit Aux Philippines. Savings and Development, 349-363.
Ololade, R. A., & Olagunju, F. I. (2013). Determinants of access to credit among rural farmers in Oyo State, Nigeria. Global Journal of Science Frontier Research Agriculture and Veterinary Sciences, 13(2), 16-22. https://www.researchgate.net/profile/Rachel-Ololade-2/publication/327058053
Omonona, B. T., Lawal, J. O., & Oyinlana, A. O. (2010). Determinants of credit constraint conditions and production efficiency among farming households in Southwestern Nigeria (No. 308-2016-5022, pp. 1-14). https://doi.org/10.22004/ag.econ.95775
Phan, D. K. (2012). An empirical analysis of accessibility and impact of microcredit: the rural credit market in the Mekong River Delta, Vietnam (Doctoral dissertation, Lincoln University). https://hdl.handle.net/10182/4975
Sebopetji, T. O., & Belete, A. (2009). An application of probit analysis to factors affecting small-scale farmers decision to take credit: A case study of the Greater Letaba Local Municipality in South Africa. African journal of agricultural research, 4(8), 718-723. http://www.academicjournals.org/AJAR
Shrestha, N. (2021). Factor Analysis as a Tool for Survey Analysis. American Journal of Applied Mathematics and Statistics, 9(1), 4-11. https://doi.org/10.12691/ajams-9-1-2
Starkweather, J., & Moske, A. K. (2011). Multinomial logistic regression.
Tranmer, M., & Elliot, M. (2008). Binary logistic regression. Cathie Marsh for census and survey research, paper, 20. http://hummedia.manchester.ac.uk/institutes/cmist/archive-publications/working-papers/2008/2008-20-binary-logistic-regression.pdf
Tu, T. T. T., Viet, N. Q., & Loi, H. H. (2015). Determinant of Access to Rural Credit and Its Effect on Living Standard: Case Study about Poor Households in Northwest, Vietnam (Note 1). International Journal of Financial Research, 6(2). http://dx.doi.org/10.5430/ijfr.v6n2p218
Zapata, N. (2006). Credit decision and rationing rules: a study of informal lenders in the Philippines. Philippine Management Review, 13, 117-126. https://ssrn.com/abstract=3075655
Ambong, R. M., & Pasco, M. (2022). Determinants of rural credit access decision-making among small-scale rice farmers in Calintaan, Occidental Mindoro, Philippines. Journal of Agribusiness and Rural Development, 63(1), 81–88. https://doi.org/10.17306/J.JARD.2022.01475
Ryan Mark Aloro Ambong
ryanmark.ambong2017@gmail.com
Graduate School of Business, San Beda University, Manila, Philippines; RDE Unit, Occidental Mindoro State College, Occidental Mindoro, Philippines Philippines
Graduate School of Business, San Beda University, Manila, Philippines; RDE Unit, Occidental Mindoro State College, Occidental Mindoro, Philippines Philippines
Michael B. Pasco
Graduate School of Business, San Beda University, Manila, Philippines Philippines
Graduate School of Business, San Beda University, Manila, Philippines Philippines
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