عرضه و تقاضا برای اعتبار دامداری در کشورهای جنوب صحرای آفریقا : درس هایی برای طراحی طرح های اعتباری جدید
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|9122||2002||14 صفحه PDF||سفارش دهید||محاسبه نشده|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : World Development, Volume 30, Issue 6, June 2002, Pages 1029–1042
Based on analysis of credit supply in Ethiopia, Kenya, Uganda and Nigeria, it is shown that public credit institutions do not have sufficient funds to meet the demand for livestock credit and cannot mobilize savings from their clients or other commercial sources for one reason or another. In addition, available credit does not reach those who need it the most and with whom it could have the greatest impact due to the application of inappropriate screening procedures and criteria to determine creditworthiness. The analysis of demand based on borrowing and nonborrowing sample households using improved dairy technology, it is shown that not all borrowers borrowed due to liquidity constraint while some borrowers and some nonborrowers had liquidity constraint but did not have access to adequate credit. Logistic regression analysis show that sex and education of the household head, training in dairy, prevalence of outstanding loan and the number of improved cattle on the farm had significant influence on both borrowing and liquidity status of a household, though the degree and direction of influence were not always the same in each study country. Based on the findings it is suggested that combining public and commercial finance could solve the problem of inadequate credit supply while inventory finance to community level input suppliers and service providers might help in getting credit to worthy and needy smallholders at lower cost than providing credit to smallholders directly.
This paper reports the results of a study conducted in four countries in sub-Saharan Africa to: (a) assess the extent to which formal agricultural credit institutions target smallholder livestock producers, the mechanisms they use for selecting borrowers and delivering credit, and the volume, type, purpose and conditions of their livestock loans, and the nature of benefits for the borrowers; (b) determine the factors that influence the demand for livestock credit, particularly for dairy production, and to assess the role of credit relative to the liquidity status of the borrower; and (c) discuss the implications of the findings for designing new credit schemes to overcome the major deficiencies of the existing systems. Smallholders are typically trapped in poverty because they do not have the money required to invest in income-enhancing innovations. This constraint has been addressed by a variety of smallholder credit schemes and a number of studies have found positive correlations between supplies of credit from formal credit institutions1 and expenditure on modern inputs such as improved seeds, irrigation and fertilizer that resulted in increased agricultural output (Braverman & Guasch, 1986; Desai & Mellor, 1993; Malik, Mushtaq, & Gill, 1991). In this way formal credit played a major role in the wide scale adoption of improved technologies that led to the Green Revolution. It has been shown that formal credit increases in importance relative to informal credit as economies develop and new technologies are adopted (Desai & Mellor, 1993; Heidhues, 1995). There is less empirical evidence on the role of credit in the smallholder livestock sector. For example, contrary to expectations, the Grameen Bank in Bangladesh extends as much as 40–50% of its loans to landless and poor farmers to acquire and raise livestock. The incentive for this is livestock's potential for generating regular incomes and realizable assets that are essential to enabling the beneficiaries to stay out of poverty in times of adversity. Processing and marketing of livestock products are also especially attractive to women borrowers. But these farmers rarely adopt improved livestock technologies leaving untapped much of the potential of the animals they purchase. A recent study in East Africa has shown that credit has a higher potential for impact through higher input use and milk yield if targeted to liquidity-constrained farms than otherwise (Freeman, Ehui, & Jabbar, 1998). A better understanding of the role of credit in the adoption of livestock technology in sub-Saharan Africa is urgently required to make it more effective in improving the livelihoods of resource-poor livestock owners and low-income consumers of livestock products. During the 1970s and early 1980s, growth in the demand for meat and milk in sub-Saharan Africa outstripped supply partly because of subsidized imports, particularly that of milk. Thereafter, as productivity continued to decline, the deficit could not be made up by imports because of falling foreign exchange reserves and consumers had less meat and milk on their tables. Projections to 2020 indicate continued rising demand for animal products with corresponding deficits, unless productivity can be improved significantly (Delgado, Rosegrant, Steinfeld, Ehui, & Courbois, 1999). This deficit is an important issue because, apart from providing high-value food, the livestock sector contributes substantially to the economies of sub-Saharan countries by providing income, employment and foreign exchange. They contribute to sustainable agricultural production with inputs and services such as draught power, manure and transportation for crop production. Livestock products—meat, milk, eggs, wool, hides and skins—on average account for 28% of agricultural GDP of sub-Saharan African countries. This share increases to about 35% when the value of animal traction, transport and manure are included. In addition, the share increases as agriculture intensifies. In summary, the livestock sector is a vital component of national development with multiplier effects in processing and marketing which is falling far short of its potential (Winrock, 1992). Since the early 1990s, the introduction of structural adjustment programs led to a reduction of real expenditure on agriculture. This included falling supplies of agricultural credit, which reduced uptake of innovations by the majority of resource-poor smallholders. Livestock technology adoption has probably suffered proportionately more in this process (De Haan, 1995) because livestock enterprises such as those involving high-yielding crossbred dairy cows require high initial outlays to acquire the animals and construct housing and install other infrastructure. They also require substantial working capital. Furthermore, in contrast to annual crops, it takes several years to raise income from investment in livestock production; meanwhile substantial expenses are incurred in, for example, maintaining maturing animals. In this paper, the supply and demand side issues related to livestock credit are analysed based on field surveys in four countries. In Section 2, sampling and data sources are described. In Section 3, the issues related to credit supply are discussed. In Section 4, the current extent of borrowing and liquidity constraint, and the determinants of being borrowers and being liquidity constraints are discussed. In Section 5, the findings are summarized and their implications for designing new credit schemes are discussed with an illustration.
نتیجه گیری انگلیسی
(a). Summary of findings All the banks in the three countries had a common official objective of increasing the flow of institutional credit to large numbers of smallholder livestock producers. To meet this objective, they had established specialized subsidized credit schemes and had opened branches in rural areas. Despite these mechanisms, this study revealed that few smallholder livestock producers actually got credit from formal sources. Often, smallholder producers were screened out by the criteria for loan eligibility. For example, UCB in Uganda required potential borrowers to show evidence that the applicant owned livestock infrastructures, which was partly what they wanted the loan for. In Ethiopia, credit was allocated on political, rather than financial considerations, and it was given on concessionary terms to state farms and cooperatives despite their poor performance and high levels of loan delinquency. Since this took up most of the funds there was little left for the many smallholder producers who were, therefore, denied credit. In Nigeria and Uganda, the banks did not insist on collateral security. They usually based creditworthiness on the personal characteristics of potential borrowers. In cases where bank officials did not have sufficient information on a potential borrower they tended to allocate credit on observable characteristics such as wealth or influence in the community. These factors screened out many potential smallholder borrowers who did not appear creditworthy or about whom they did not have complete information. Because the credit was subsidized, demand tended to exceed supply and the available funds had to be rationed. The rationing rules often favored influential community members who, for the most part, got larger loans. Since the amount of the subsidy increased in proportion to the amount of the loan these policies aggravated the income inequalities between small and large borrowers. In Uganda and Nigeria, most of the loans were short-term with fixed repayment periods. AIDB in Ethiopia was the only institution to have the majority of its portfolio in long-term loans with more flexible repayment periods. The other banks may have opted for short-term loans because of the need to collect loans quickly, especially under conditions of high inflation and controlled interest rates, which rapidly erode the real value of loan repayments. Another reason for short-term loans might have been that borrowers did not have assets to offer as collateral. There is, a priori, no ideal loan term. It is important to maintain the flexibility to relate loan terms to factors such as the uses to which it will be put, the cash flow generated by the funded activity, and the attendant risks. When these factors are not taken into account the consequences are likely to be inefficiencies in the use of loan funds and increased incentives to default. This occurred in Uganda where under UCB's conditions on short-term loans borrowers were not able to generate sufficient revenues to repay their loans, within the stipulated periods, from the proceeds of the funded investments. In Nigeria, the short-term loans given by NACB for beef fattening were much shorter than the average fattening period of between 12 and 18 months. This limited borrowing to customers who had alternative means of financing repayments and effectively excluded those who had most need for credit. On the other hand, in Ethiopia, where most livestock loans ranged from 4 to 5 years, bank officials' lax attitude toward recovery and low level of supervision contributed to poor loan recovery even though revenues were generated by funded activities sooner than the permitted repayment period. In an attempt to encourage repayments the Service Cooperatives were given financial incentives, in addition to threats of denial of fresh loans in case of default by some of their members. Apparently these measures were also not effective because the option of denying the service cooperatives fresh loans because of outstanding repayments was not actually exercised. The records show that fresh loans were never denied for this reason and political motives, which promoted cooperatives irrespective of their performance, also contributed to low levels of loan recovery (Tilahun, 1994). The poor rate of loan recovery led to failure of the credit programs. In Nigeria, NACB's 85% recovery rate suggested that its mandatory collection policy, which denied future loans to defaulters, was effective. But, the bias toward relatively large borrowers contributed to high rates of loan recovery because these producers have the financial means and appreciated the high value of NACB's subsidized credit line (Aku, 1986). The UCB in Uganda reported recovery rates of 66% on livestock loans in 1990. This was partly attributed to the fact that loan repayments were consistent with the regular cash flow of dairy activities. The farmers were paid weekly or bi-weekly by the dairy corporations, which are the major buyers and distributors of fresh milk in Uganda. An important aspect of improving the supply of credit to rural clients is the development of true financial intermediaries that facilitate savings mobilizations and credit distribution (Desai & Mellor, 1993). But, the credit institutions examined in this study did not mobilize savings. They all relied completely on the government and foreign donors for loanable funds. In Ethiopia and Nigeria this was a result of deliberate government policy, which prohibited mobilizing savings from the public. In addition, these institutions only distributed credit and did not provide any banking services to their clients. Thus, they could not be regarded as true financial intermediaries. They did not recognize the links between demand for and supply of funds nor did they exploit the complementarities between investment in new technologies and increased liquidity. These findings are consistent with the findings of related studies in the crop sector. With few exceptions, formal credit programs in sub-Saharan Africa have performed rather poorly. Despite substantial outlays, credit subsidies have led to misallocation of resources, have typically not led to significant increases in adoption of new technologies, and have not succeeded in replacing traditional money lenders (Adams, 1995; Braverman & Guasch, 1986; Krause et al., 1990; Olomola, 1994; Von Pischke, Adams, & Donald, Adams & Donald, 19831983; Von Pischke, 1995; World Bank, 1994). The surveys of the demand for credit for dairy activities revealed that smallholder farmers in Ethiopia, Kenya and Uganda were prepared to borrow from formal credit institutions as well as use their own funds to purchase crossbred and/or purebred exotic dairy cows. Some farmers used small amounts of their loans to build barns, water supply systems or purchase feeds and veterinary care. In all three countries, there were farms among both borrowers and nonborrowers who did not have sufficient funds to expand or improve their dairy enterprises. This made it necessary, in addition to classifying farms as borrowers and nonborrowers, to also classify them according to their liquidity status in which credit could be a component. Regression analysis showed significant differences between the profiles of borrowers vs nonborrowers and between liquidity-constrained and liquidity-nonconstrained farms in all three countries. Sex of household head, education, dairy training, prevalence of outstanding loan and the number of improved cattle on the farm had significant influence on both borrowing and liquidity status, though the degree and direction of influence were not always the same in each country. Contrary to the findings of the supply side analysis, farm size and herd size had neutral effects on borrowing in all three countries, which probably could be explained by the fact that this was based on a sample focusing only dairy farmers. Borrowers used their loans mainly to acquire improved cows, so the primary impact of credit was to increase milk production through increased dairy herd size. Borrowers and nonborrowers alike spent very little on better feed and management. This is not a tenable long-term solution because smallholders cannot readily expand their crop and grazing land areas. Thus greater emphasis must be given to increasing milk production through better feeding and management. Assuming that cash constraints were the primary reason for inadequate spending on inputs there is great potential for increasing milk production by reinforcing loans for acquiring cows with working capital loans to ensure proper feeding and management. These findings from supply and demand side analysis suggest that, public credit institutions do not have sufficient funds to meet the demand for credit and cannot mobilize savings from their clients or other commercial sources for one reason or another, and available credit does not reach those who need it the most and with whom it could have the greatest impact. To become more effective and sustainable, credit institutions that intend to serve smallholders need to rationalize their screening procedures and the criteria they use to determine creditworthiness. To reach poor and liquidity-constrained smallholders the credit must also be provided at a cost they can afford while the system remains viable. That includes interest charges and transaction costs and for small amounts of money the latter becomes most critical. Lower interest rates would encourage innovation but they must be consistent with the cost of capital, the risk of default and servicing costs. To be effective and encourage repayments, the amount of the loans and their repayment terms must be matched to the income generating and cash flow patterns of the investments for which the loan are given. That means they must square any subsidy on interest rates with the potential contribution of the credit to overall output growth and economic development. To be sustainable, credit systems need to be able to attract savings to provide capital for future lending. (b). Implications for designing new credit schemes Recognizing the need to involve commercial banks to increase credit supply, governments in some countries have tried to use legislation to force them to increase the proportion of agricultural lending in their portfolios. But this was not successful because it is contrary to banking norms, so some other way must be found. Nominal interest rates have been found to be less important than intuitively assumed in determining demand for credit (Henk Moll, personal communication). In order to engage the poorest farmers however, the interest that they are charged should at least not be more than that charged to their commercial large-scale competitors. This conundrum can be resolved by leveraging high-interest commercial money with low-interest government funds. To illustrate this assume that government (G) wants smallholders to have access to inputs at say 16.5% per annum despite the fact that commercial banks (B) are charging 20% per annum. This could be achieved through an appropriate mix of government (either from own sources or from foreign loan or aid) and commercial finance as illustrated below: ––If (B) commits its own $3 million at 20% interest, it would expect to earn $600,000 per annum. The interest rate comprised of say 10% cost of capital, 5% cost of servicing (transactions cost) and 5% coverage for default (risk). ––If (G) lends $3 million to (B) at 3% per annum, (B) would owe (G) $90,000 per annum but would still be responsible for recovering servicing cost and risk, for which the bank would need to charge an additional 10% to earn an additional $300,000. ––Then (B) would need to recover $990,000 by investing $6 million, and could do so by charging 16.5%. This would make more funds available to more people at lower cost. As noted above however, the interest rate on capital is not always the main component of the cost of credit to the borrower. On small loans the transaction costs are usually more serious than the interest charges because the time and paperwork does not decrease proportionately. They are much higher per unit of credit than for large borrowers, especially those who deal directly with their suppliers or bank managers. This is the reason why even large-scale farmers prefer supplier credit and overdrafts to loans with lower interest charges. Feed mills and other farm input suppliers in developed countries and in agriculturally developed sectors in developing countries have their own source of inventory finance that enables them to provide goods on credit. A classic illustration of this was the interdependence between European farmers and Indian shopkeepers in pre-independent Kenya. The Central Bank of Uganda and Barclays also initiated a similar scheme in the early 1970s but political disruption did not permit its full implementation. To provide smallholders with the same possibility of being able to take goods on credit village suppliers including livestock breeders, farmers' supply stores and veterinarians may be provided with inventory finance tied to the inputs required by the smallholders. Without such support they will necessarily continue to focus their businesses on more profitable fast turnover goods such a beer and cigarettes. But, with tied inventory finance they would become very efficient credit providers because, through their long-term relationships with their customers, they can assess creditworthiness instantly on the spot. They also become motivated extension agents because the only way they can make a profit is to move the goods off their shelves. Enabling smallholders to purchase goods in the form, amounts and locations of their choice would encourage them to innovate and get optimum production from their smallholdings and livestock. But these are not the characteristics of the prevailing credit schemes. For example, in Kenya smallholder dairy producers can only get credit if they sell milk through a cooperative even if it does not offer the best price. To make matters worse, they get credit only when they have milk to deliver and have good records of delivery, which means that they cannot buy feed for steaming up cows prior to parturition and, therefore, can never hope to reach the full production potential of their cows (Steve Staal, personal communication). By providing larger inventory finance loans to relatively few easily reached creditworthy village suppliers, rather than small loans to thousands of small producers, the commercial banks would be able to spare the unusually high servicing costs associated with rural credit. The finance would only be available for agreed inputs in noncommercial quantities that are not otherwise readily available in rural areas. To ensure that the funds reach the intended beneficiaries, the amount provided by the government would be proportional reimbursement of the amounts advanced by the commercial bank. If the provision of inventory finance for rural suppliers of goods and services is effective in encouraging smallholders to take up innovations, a second phase could be developed to encourage savings. If the scheme is successful, it would provide a solution to the long running difficulty of engaging commercial banks in rural finance. It would also provide governments and development agencies such as the World Bank and IFAD with an exceptional instrument for influencing the cost of credit to smallholders without meddling in the commercial decisions of participating banks.