The impact of credit access on household food security in Malawi

Abstract

This observational study examines the impact of access to either formal or informal credit on household food security in a credit-constrained developing country context of Malawi. Using the fifth Integrated Household Survey (IHS5), the study employs the Endogenous Regime Switching (ERS) approach and the Tobit regression model, in light of potential endogeneity between credit access and food security. Regression results show that key determinants of access to formal credit include education attainment and household size, whereas determinants of informal credit access include access to extension services, landholding size, household size and exposure to shocks. The study finds that although access to formal credit improves household food security, access to informal credit worsens food security within the context. Various policy implications are drawn from these results.

Keywords

• Food security
• Credit access
• ERS
• Tobit
• Malawi