Economics Commons^™

Effects Of Agricultural Loans In Developing Countries – Benin Case Study, Nicaise S. M. Sagbo

Theses and Dissertations--Agricultural Economics

Limited access to financial services is known as a major constraint to agricultural development (FAO, 2002). Farmers need liquidity to face agricultural expenses throughout the production cycle but mainly at the beginning. Mainstream financial institutions are reluctant to serve the agricultural sector for several reasons. First, they consider the sector to be highly risky with low performance. Also, agricultural activities depend on the weather, they take place in remote rural areas, and commodities prices are volatile. All these aspects make it hard for standard banks to reach their profit goals when lending to farmers. Since microfinance was conceived, it has …