A Cambodian smallholder farmer's choice between microfinance institutes and informal commercial moneylenders: the role of risk attitude

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Annkathrin Possner ◽  
Selina Bruns ◽  
Oliver Musshoff
Keyword(s):  
Financial Literacy ◽  
Financial Services ◽  
Smallholder Farmers ◽  
Risk Attitude ◽  
Multinomial Logit Model ◽  
Individual Risk ◽  
Risk Averse ◽  
Content Type ◽  
Microfinance Institution ◽  
History Of

PurposeThe purpose of this paper is to examine the extent to which individual risk attitude determines a Cambodian smallholder's choice between a commercial informal loan and a credit from a licensed microfinance institution.Design/methodology/approachThe paper analyzes a sample of smallholder farmers in the Ratanakiri province in northeastern Cambodia, a country with a long history of microfinance and a saturated microcredit market. Employing a binary and a multinomial logit model, this paper assesses the effect of individual risk attitude on the choice of a financial instrument.FindingsThe results reveal a statistically significant relationship between the choice of a credit source and an individual's risk attitude: On average (c.p.) the less risk averse the smallholder is, the more they tend to prefer an unlicensed commercial lender.Practical implicationsThe findings suggest that less risk-averse individuals tend to take up riskier and generally more expensive informal loans. Measures to increase the safe access to financial services for less risk-averse borrowers as well as improvements in financial literacy should be undertaken to protect smallholders from taking risky choices.Originality/valueAlthough existing studies have examined the importance of risk attitudes between credit provider and borrower, they focus mainly on the lender's perspective. This paper provides new insights on how risk attitude influences the borrower's choice in Cambodia. Thus, this study is relevant for policymakers in countries with oversaturated microcredit markets and a high prevalence of informal lenders.

German farmers’ acceptance of subsidized insurance associated with reduced direct payments

2019 ◽  
Vol 79 (3) ◽  
pp. 408-424 ◽  
Author(s):  
Johannes Möllmann ◽  
Marius Michels ◽  
Oliver Musshoff
Keyword(s):  
Public Support ◽  
Risk Attitude ◽  
Multinomial Logit Model ◽  
Negative Influence ◽  
Individual Risk ◽  
Farm Income ◽  
Complete Replacement ◽  
Content Type ◽  
Direct Payments ◽  
The Right

Purpose The outstanding reform of the Common Agriculture Policy allows for changes regarding its most criticized component, the direct payment scheme. The purpose of this paper is to investigate farmers’ acceptance of subsidized whole farm income insurance (WFI) and single-crop, multi-peril revenue insurance (RI) that are associated with a reduction of direct payments. Design/methodology/approach By applying a generalized multinomial logit model on data of a discrete choice experiment, German farmers’ preferences, expressed as their willingness to pay (WTP), for WFI and RI are revealed. Findings The results show a positive WTP for WFI and RI. The average farmer has a higher WTP for WFI than for RI. By increasing the coverage level, the negative influence of a reduction of direct payments on WTP for insurance can be compensated. Individual risk attitude and assessed importance of direct payments for the farm business show a statistically significant influence on the WTP. Practical implications The results suggest that, even if direct payments were abolished in order to subsidize WFI or RI, German farmers’ WTP for both insurance products would remain positive. However, to finally assess whether subsidizing insurance is the right means of providing public support, it is necessary to assess whether farmers’ WTP meets the costs for such an insurance scheme. Originality/value To the authors’ knowledge, this is the first study investigating German farmers’ WTP for WFI and RI using an experimental approach by explicitly considering the partial to complete replacement of direct payments by subsidized insurance.

Effects of village savings and loan association on agricultural value productivity in Northern Region of Ghana

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Peter Dawuni ◽  
Franklin Nantui Mabe ◽  
Osman Damba Tahidu
Keyword(s):  
Propensity Score ◽  
Propensity Score Matching ◽  
Rural Areas ◽  
Financial Services ◽  
Smallholder Farmers ◽  
Northern Region ◽  
Inclusive Development ◽  
Cross Sectional ◽  
Content Type ◽  
Savings And Loan

PurposeAgriculture in Ghana is dominated by smallholder farmers in rural areas. Majority of these farmers are resource-poor and faced with serious challenges in accessing formal financial services towards farming needs attributed to the stringent requirements. To bridge this gap, village savings and loan associations (VSLA) have been promoted in rural areas as an alternative to meeting the credit needs of smallholder farmers. Credit plays a vital role in input acquisition among farmers for improved agricultural value productivity. This study assesses the contribution of VSLA to agricultural value productivity in the Northern Region of Ghana.Design/methodology/approachThe methodology is a primary cross-sectional data collected with the help of a semi-structured questionnaire. This study, therefore, applied a propensity score matching (PSM) to assess the effects of VSLA on agricultural value productivity.FindingsResults from the PSM revealed that extension contact, contract farming, television set ownership, participating in “Planting for Food and Jobs” and nature of roads, including receiving VSLA information from members' increases participation decision of farmers in VSLA. Conversely, age of a farmer, household size, distance to output market and farmers in the Sagnarigu Municipality have negatively influenced VSLA participation. The propensity score matching estimates showed that members of VSLA obtained 38.2% higher agricultural value productivity than non-members.Originality/valueVillage savings and loans associations can be promoted among smallholder farmers as an effective alternative to formal financial service for inclusive development.

Risk management behaviour in banking

2018 ◽  
Vol 44 (7) ◽  
pp. 902-918 ◽  
Author(s):  
Elizabeth Sheedy ◽  
Martin Lubojanski
Keyword(s):  
Risk Management ◽  
Financial Services ◽  
Older Workers ◽  
Female Gender ◽  
Risk Tolerance ◽  
Individual Risk ◽  
Speaking Up ◽  
Data Set ◽  
Content Type ◽  
Management Behaviour

Purpose Risk management is now considered the responsibility of all financial services professionals, not just senior leaders or risk specialists. Very little is known about the role of staff in risk management, so the purpose of this paper is to, first, clarify what constitutes “desirable” risk management behaviour by financial services staff based on the practitioner and regulatory literature. Based on this understanding, the authors analyse the characteristics of those who are most likely to display such behaviour. Design/methodology/approach The paper analyses some 36,000 survey responses across ten banks headquartered in Anglo countries. Findings Desirable risk management behaviour at the employee level includes compliance but goes well beyond mere compliance to include speaking up, thoughtful engagement with and accountability for the risk management framework. The authors find a significant negative association between individual risk tolerance and desirable risk management behaviour. Older workers as well as those with greater seniority are more likely to report desirable risk management behaviour. The link between female gender and risk management behaviour is not supported after controlling for individual risk attitudes. The authors provide evidence that females who succeed in financial services do not conform to traditional female stereotypes. Practical implications Findings suggest financial institutions should hire/retain more older workers and those with lower risk tolerance to improve risk management. Hiring more females, however, is not likely to lead to better risk management. Originality/value The paper is the first to investigate risk management behaviour in financial services staff. The research exploits a unique, difficult to obtain data set.

A parametric test evaluating smallholder farmers’ training needs in Uganda

2018 ◽  
Vol 8 (3) ◽  
pp. 537-553 ◽  
Author(s):  
Joanita Kataike ◽  
Durga Prasad Venkata Modekurti ◽  
Eric Butali ◽  
David Magumba ◽  
Andrew Ronnie Mugenyi ◽  
...  
Keyword(s):  
Value Chain ◽  
Financial Literacy ◽  
Smallholder Farmers ◽  
Dairy Farmers ◽  
Content Type ◽  
Record Keeping ◽  
Pearson Coefficient ◽  
Smallholder Dairy ◽  
Milk Marketing ◽  
Training Programmes

PurposeEffective rural agribusiness development requires dedicated training programmes therefore, this paper is an attempt to investigate smallholder farmers’ TNs in the dairy agribusiness sector. The purpose of this paper is to study a bigger research project of the dairy value chain in agribusiness framework in the Rwenzori region.Design/methodology/approachA sample size of 100 dairy farmers were randomly selected from two Districts in the Rwenzori region. The descriptive statistics (mean and standard deviation) provided a basis for discussion. Furthermore, parametric Pearson coefficient test was conducted to examine the smallholder farmers’ TNs and assess its association with selected socio-demographic characteristics of the dairy farmers.FindingsThe analysis indicated that dairy farmers expressed the need for a training program. Most frequently requested topics include: fodder cultivation, quality and safe milk handling, milk marketing, calf feeding and rearing, animal nutrition and financial literacy out of 12 topics. The least desired TNs was record keeping.Research limitations/implicationsThe findings contribute to the understanding of dairy farmers’ TNs.Practical implicationsThe identified 12 key training intervention areas for the dairy farmers inform policymakers Dairy Development Authority and other development bodies in the Rwenzori region to address the challenges and improve smallholder dairy farming practices.Originality/valueThe study applies a synthesis review to identify theoretically acceptable variables that measure smallholder farmers’ TNs in the dairy agribusiness. The paper also shares the empirical evidence of a pioneering attempt to identify smallholder dairy farmers’ TNs in Uganda.

Financial exclusion and financial capabilities in Canada

2016 ◽  
Vol 8 (2) ◽  
pp. 212-227 ◽  
Author(s):  
Laura Lamb
Keyword(s):  
Survey Data ◽  
Financial Literacy ◽  
Financial Services ◽  
Conclusive Evidence ◽  
Exploratory Research ◽  
Financial Capability ◽  
Content Type ◽  
Financial Exclusion ◽  
Canadian City ◽  
The Relationship

Purpose The financially excluded are often denied basic financial services from mainstream banking institutions, leading them to high-cost fringe finance institutions (FFIs) such as payday loan companies and pawnshops. While strategies to address financial exclusion often include financial capabilities education, there does not appear to be evidence suggesting such education is an appropriate solution. The purpose of this study is to explore the relationship between financial capability and financial exclusion with survey data collected from the Canadian city of Kamloops located in the southern interior of British Columbia. Design/methodology/approach This exploratory research addresses the objective with survey data collected on the banking habits and financial capability levels of fringe finance users in a Canadian city. Findings The results imply that fringe finance users do not have lower levels of financial capability than those who do not use fringe finance, when education and income are controlled. Research limitations/implications Limitations include the relatively small survey sample of 105 people in one urban center in Canada. Originality/value While financial literacy is acknowledged to be an important life skill for all members of society, there is no conclusive evidence suggesting it is a solution to financial exclusion. This is the first research to examine the relationship between financial exclusion and fringe finance use in Canada by collecting data on fringe finance users with face-to-face interviews.

scholarly journals Financial literacy and financial well-being of Australian consumers: a moderated mediation model of impulsivity and financial capability

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad S. Tahir ◽  
Abdullahi D. Ahmed ◽  
Daniel W. Richards
Keyword(s):  
Financial Literacy ◽  
Financial Services ◽  
Well Being ◽  
Moderated Mediation ◽  
Mediation Model ◽  
Financial Capability ◽  
Moderator Variable ◽  
Content Type ◽  
Moderated Mediation Model

PurposeThis study aims to test a moderated mediation model for a twofold purpose. First, to examine the mediating role of financial capability (FC) in the association between financial literacy (FL) and financial well-being (FW). Second, to analyze if non-impulsive future-oriented behavior (NIB) moderates the associations of FL with FC and FL with FW.Design/methodology/approachThe authors use the PROCESS macros in IBM SPSS Statistics to test the moderated mediation model and analyze the 2016 wave of the Household, Income and Labor Dynamics in Australia Survey.FindingsThe empirical analysis shows that FC partially mediates the association between FL and FW. Furthermore, the moderated mediation analysis shows that NIB strengthens the associations of FL with FC and FL with FW. Specifically, the positive associations of FL with FC and FL with FW significantly increase for those consumers who score high on NIB.Practical implicationsThe findings have implications for the financial services industry. Professional financial planners can positively improve the ability of consumers to deal with their financial matters by highlighting the importance of FL and NIB.Social implicationsThe study findings suggest educating consumers to discourage impulsive behavior and encourage them to create financial plans as it will enhance their ability to conduct financial tasks efficiently, improving their FW.Originality/valueTo the authors’ knowledge, this is the first study to assess a moderated mediation model, which examines the role of FC as a mediator variable and NIB as a moderator variable in the association between FL and FW.

Improving productivity among smallholder farmers in Ghana: does financial inclusion matter?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
James Atta Peprah ◽  
Isaac Koomson ◽  
Joshua Sebu ◽  
Bukari Chei
Keyword(s):  
Financial Services ◽  
Smallholder Farmers ◽  
Agricultural Productivity ◽  
Financial Inclusion ◽  
Living Standard ◽  
Content Type ◽  
Access To Credit ◽  
Pooled Data ◽  
Financial Products ◽  
Practical Implications

PurposeDoes financial inclusion matter for productivity among smallholder farmers? The authors answer this question by using the sixth and seventh rounds of the Ghana Living Standard Survey to examine the extent to which financial inclusion affects productivity among smallholder farmers in Ghana.Design/methodology/approachThe study uses a pooled data of the 6th and 7th rounds of the Ghana Living Standard Survey which are national representative data. The authors model an Instrumental Variable (IV) to correct for endogeneity in financial inclusion and a dominance analysis to examine the effects of access to credit, ownership of savings account and insurance product on farmers' productivity.FindingsResults from the study indicate that financial inclusion significantly enhances productivity. Moreover, credit, savings and insurance products influence productivity at various degrees. Thus, expanding the scope of financial services (access to credit, savings and insurance) among smallholder farmers is crucial for inclusive finance and sustainable agricultural production.Practical implicationsThe findings of the study have implications for financial institutions in the design of financial products that the meet the needs of smallholder farmers.Originality/valueSeveral studies have looked at how access to credit influences agricultural productivity in Africa. However, in recent times financial inclusion has been advocated for because it goes beyond mere access to credit. This paper to the best of our knowledge is the first of its kind to examine how financial inclusion could affect agricultural productivity in Ghana.

Revisiting the measurement of financial inclusion of rural smallholder farmers in Nigeria

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olayinka O. Adegbite ◽  
Charles L. Machethe ◽  
C. Leigh Anderson
Keyword(s):  
Financial Literacy ◽  
Smallholder Farmers ◽  
Household Survey ◽  
Well Being ◽  
Sampling Procedure ◽  
Financial Inclusion ◽  
Policy Recommendations ◽  
Financial Capability ◽  
Content Type ◽  
Consultative Group

PurposeThis study aims to develop and apply a multidimensional measure of financial inclusion (FI) to address measurement issues and determine the level of FI of rural smallholder farmers and the contribution of domain indicators to the level of FI in Nigeria.Design/methodology/approachThe paper adapts the Alkire–Foster method to develop a multidimensional FI index (MFII). A stratified two-stage sampling procedure is used to select 2,300 rural respondents from the 2016 Consultative Group to Assist the Poor (CGAP) Smallholder Household Survey.FindingsResults indicate that 78% of rural smallholder farmers in Nigeria are financially excluded. In addition, owning a formal account is significantly different (p < 0.00) from being financially adequate. The financial capability domain contributes the least (29.66%) to the multidimensional FI (MFI) of rural smallholder farmers relative to financial participation and financial well-being. Financial literacy, consumer protection, overcoming barriers such as high transaction costs and financial planning indicators contribute the least to FI relative to formal access.Practical implicationsResults of the study lead to policy recommendations for increasing the FI of rural smallholder farmers in Nigeria, which may be applicable to other countries.Social implicationsAchieving sustainable FI requires that interventions increase the FI of rural smallholder farmers by strengthening financial capability, participation and well-being and not only focus on formal account owners.Originality/valueThe study provides a new methodological and empirical contribution to the FI literature on rural smallholder farmers.

The pricing strategy of dual-channel supply chain with risk-averse agents and heterogeneous preference consumers

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rufeng Wang ◽  
Zhiyong Chang ◽  
Shuli Yan
Keyword(s):  
Supply Chain ◽  
Risk Control ◽  
Optimal Strategies ◽  
Risk Attitude ◽  
Risk Attitudes ◽  
Risk Averse ◽  
Content Type ◽  
Dual Channel ◽  
Heterogeneous Preference ◽  
Dual Channel Supply Chain

PurposeThe purpose of this paper is to investigate the pricing strategy and the impact of agents' risk preference in a dual-channel supply chain in which both agents are risk-averse.Design/methodology/approachThe authors make use of the mean-variance (MV) method to measure the risk aversion of the agents and apply Stackelberg game to obtain the optimal strategies of the proposed models. Furthermore, the authors compare the optimal strategies with that in the benchmark model in which no agent is risk-averse.FindingsThe authors find that the pricing decisions can be divided into four categories according to the risk attitudes of the agents: the decisions that are independent of two agents' risk attitudes, the decisions that depend on only one agent’s risk attitude (i.e. depend on only manufacturer's risk attitude and depend on only retailer's risk attitude) and the decisions that depend on both agents' risk attitudes. In addition, the authors find that the retail price will be lower and the wholesale price in most cases will be lower than that in the benchmark when at least one agent's risk control is effective; the demand will be always increasing as long as one agent's risk control is effective. Furthermore, compared to the benchmark, a win-win strategy (i.e. Pareto improvement) for the supply chain members can be obtained in a certain range where the agents' risk controls are appropriate.Originality/valueThis research provides a theoretical reference for the managers to make the pricing decisions and the risk control in dual-channel supply chains with heterogeneous preference consumers.

An investigation of the impact of financial literacy, risk attitude, and saving motives on the attenuation of mutual fund investors’ disposition bias

2017 ◽  
Vol 43 (3) ◽  
pp. 282-298 ◽  
Author(s):  
Sara Jonsson ◽  
Inga-Lill Söderberg ◽  
Mats Wilhelmsson
Keyword(s):  
Interest Rates ◽  
Mutual Fund ◽  
Financial Literacy ◽  
Risk Attitude ◽  
Individual Characteristics ◽  
Disposition Effect ◽  
Content Type ◽  
Fine Grained ◽  
Separate Model ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of financial literacy, risk attitude, and saving motives on the attenuation of mutual fund investors’ disposition bias. Specifically, the authors focus on individual characteristics explaining the investors’ propensity to sell shares in a poorly performing mutual fund. Design/methodology/approach The study relies on survey data collected from 1,564 Swedish households in 2013. The authors test the hypotheses considering three different portfolio compositions and portfolio performances. Each composition corresponds to a dependent variable and a separate model which are estimated using ordinal logistic regression. Findings The authors find that different forms of financial literacy affect attenuation of the disposition effect. Specifically, the authors find that knowledge about mutual funds and knowledge about current market conditions affect the attenuation of the disposition effect, whereas the authors find no support for the effect of “technical financial knowledge” (e.g. the ability to calculate compound interest rates). The authors also find no support for the effects of risk attitude and saving motives on the attenuation of the disposition bias. Originality/value The findings suggest a need for a more fine-grained conceptualization of the financial literacy concept and its effect on investors’ disposition bias. Since an important implication of the findings is that financial literacy could potentially help people overcome behavioral bias, the study provides insights for policymakers as well as into the discussion on the design of consumer education programs.

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