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Title:Determinants of Participation in Rural Credit Markets in Africa: Evidence from Botswana and Ethiopia
Authors:Amde, Yisgedullish
Teklu, Tesfaye
Asefa, Sisay
Periodical:African Rural and Urban Studies
Geographic terms:Ethiopia
Subjects:agricultural credit
Economics and Trade
Development and Technology
Agriculture, Natural Resources and the Environment
Abstract:This paper provides insight into the determinants of demand for rural credit markets in Africa by analysing the demand for credit based on primary survey data from rural Botswana (where research was carried out in 1990-1991) and Ethiopia (where research was carried out in 1991-1992). Specifically, it examines the main features of rural credit markets, the characteristics of borrowers who participate in rural financial markets, and the interface between income-generating employment programmes and participation in the credit market. It was found that about half of the sampled households in both countries participate in rural credit markets, and the majority of the borrowers use informal markets. The results also show that credit market participation is related to seniority within households and relative income control. Participation in labour-intensive employment programmes, such as cash-for-work (CFW) and food-for-work (FFW), had differing effects. In Botswana, CFW led to increased credit participation. In Ethiopia, FFW income partially offset the demand for credit. Bibliogr., notes.