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Poverty and Access to Credit in Rural Ethiopia: Empirical Evidence from Coffee-Growing Households

Abstract: 

This paper tries to establish the link that access to credit has on the welfare status of households in five coffee growing zones of Oromia and SNNP regional states. Both descriptive and econometric methods are used to see the link between poverty and access to credit. The incidence of poverty was found to be high in the study areas and differs across zones in the two regions. Moreover, poverty has a strong link with access to credit. The study found that households who have an access to credit have more probability of getting out of poverty than households who don't have an access to it. The odds of getting out of poverty for households who have an access to credit are 1.1 times that of the probability of getting out of poverty for those households having no access to credit. Moreover, a household having an access to credit is predicted to consume 1.4 per cent more ceteris paribus. This is because credit or savings can provide capital for financing inputs, labor and equipment for income generation. Therefore, provision of rural credit to these households will help them finance investments and to insure against risks and thereby enhance their welfare.

Corporate Author: 
Getnet Alemun & Ethiopian Economic Association/Ethiopian Economic Policy Research Institute
Publisher: 
Ethiopian Economic Association (EEA)
ISBN/ISSN: 
978-99944-54-15-0
Primary Descriptors: 

poverty profile

Secondary Descriptor: 

Credit

Geographic Descriptors: 
Ethiopia, Rural
Cataloge Date: 
02/27/2013
Broad Subject heading: 
poverty
Call Number: 
330.963 PRO 2010
Serial Key Title: 
Proceedings of the Seventh International Conference on the Ethiopian Economy
Publication catagory: 
Content type: 
Volume: 
II
Publication date: 
2013-05-27 23:10:00
Forum or Discussion date: 
2013-02-27 15:02:22
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Book
Current frequency: 
Annualy