Author: Abid Hussain
AIT Library Call Number: AIT Diss. no.RD-12-03
Year: 2011
Academic Program: Regional and Rural Development Planning (RRDP)
Type: Thesis (Ph.D.) – Asian Institute of Technology, 2012
Examination Committee: Gopal B. Thapa (Chairperson); Soparth Pongquan, Rajendra Prasad Shrestha, Thankom G. Arun(Examination Committee Members)
Abstract: Formal institutions working under the prudential regulations of the State Bank of Pakistan are supposed to disburse credit for farm inputs, machinery, livestock, poultry and other various agricultural activities. This study analyzed smallholders’ access to and adequacy of credit, and its effectiveness to improve their farm production, income and household food security, using primary data collected from 208 households with landholdings up to 5 acres (=2 ha) through a standardized questionnaires, focus-group discussions and unstructured interviews. The findings depicted a partial success of the national credit policy in terms of the ration of households having access to fo1mal credit but appeared even less efficacious when the total amount of credit demanded and obtained were compared. Among the three types of smallholders compared, i.e. lower-smallholders (~1.0 acre), middle-smallholders (1.01-2.50 acres) and upper-smallholders (2.51-5.00 acres), the lower-smallholders obtained least benefit from the policy as reflected in the formal credit accounting for 12% of the total credit obtained and only 6% of the total credit demanded. The other two groups of smallholders had comparatively better access to fo1mal credit. Due to a lack of adequate access to formal credit, info1mal lenders continued to play an overriding role in the rural credit markets. Fundamentally, credit has substituted substantial portions of households’ consumption expenditures (credit fungibility) and gradually their own capital for fa1m investment (credit dependency). Due to these substitutions, it cannot be stated that credit is being used effectively on agricultural purposes though it has improved the farm investment and farm production. These improvements cannot merely be attributed to the amount of credit rather these are also supported by the supplementary features associated with particularly the informal credit, i.e. quality of inputs and intensive extension services. Consequently, smallholders started shifting from subsistence agricultur
Scholarship Donor(s): Higher Education Commission (HEC) of Pakistan AIT Fellowship
Note: A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Regional and Rural Development Planning, School of Environment, Resources and Development
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