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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Some notes on the agricultural credit system in Malawi: Case study in the Ntcheu-Rural-Development-Project
Authors:Enders, C.
Kasch, B.
Year:1987
Periodical:African Review of Money, Finance and Banking - Supplement to 'Savings and Development'
Issue:1
Pages:15-25
Language:English
Geographic term:Malawi
Subjects:agricultural credit
economics
agriculture
External link:https://www.jstor.org/stable/23027191
Abstract:The seasonal credit system in Malawi is characterized by group approach and credit in kind. It has been judged by various authors to be an administrative and institutional success (e.g. high repayment rate). However, a broader analysis, with the Ntcheu Rural Development Project (RDP) as case study, suggests this 'success' needs some qualification. For the smallholder, the profitability of the main investment opportunity, hybrid maize, has decreased considerably over the past years, while the relatively inflexible credit-in-kind approach, with emphasis on hybrid maize, permits only a limited adjustment to changing economic conditions (e.g. increasing fertilizer prices). As a credit institution, Ntcheu RDP has a high repayment rate. However, the interest rate of the credit does not even cover the erosion of the capital through inflation and the credit system is, therefore, not sustainable in the long run. Moreover, since there is nearly no additional production in Ntcheu RDP induced by credit, it is very difficult to justify the interest rate subsidy. Bibliogr., notes, ref., sum. in French.
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