Fertilizer adoption, credit access, and safety nets in rural Ethiopia

Million Tadesse
  • Agricultural Finance Review, August 2014, Emerald
  • DOI: 10.1108/afr-09-2012-0049

Fertilizer adoption, credit contracts and safety nets

What is it about?

Endogeneity of credit access, third party collateral, credit market, rural economy, safety net programs, panel data econometrics

Why is it important?

A theoretical model of credit contract under third party collateral was developed. Estimation considers the endogenous credit access variable by using valid instruments. The validity and relevance of instruments are tested. Poor households are credit constrained but it can be possible to improve this by targeting these groups.


Dr Million A Tadesse
University of Waterloo

The paper is more innovative by openly arguing moral hazard issues from credit providers and farmers perspectives. A penalty is introduced in the theoretical model and argued the credit market is better off if regulated by market mechanisms than government involvement.

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The following have contributed to this page: Dr Million A Tadesse