Access to credit and agricultural productivity: Evidence from maize producers in Benin

Abstract

AbstractAccess to agricultural credit is still a challenge in developing countries. The weakness of agricultural financing prevents producers from acquiring the modern technologies that are essential for the development of their activity. This paper aims to determine the impact of access to credit on agricultural productivity in Benin using alternative measures of productivity. To do this, we use the endogenous switching regression model to control for potential selection and unobserved heterogeneity issues associated with this impact analysis. The data used comes from the statistical databases of the National Agricultural Research Institute of Benin. The results show that the adoption of improved seeds, the geographic location, the area sown and member of peasant organization determine producers’ access to credit are factors that determine producers’ access to credit. Farmers’ access to credit generates an estimated gain of 40.07% and 31.97% respectively for production per hectare and production per FCFA invested. These results require a comprehensive and coherent public action.

Keywords

• Access to credit
• agricultural productivity
• maize producers
• ESR model
• Benin