nep-mfd New Economics Papers
on Microfinance
Issue of 2025–05–19
two papers chosen by
Marco Novarese, Università degli Studi del Piemonte Orientale


  1. The determinants of the financing decision for agricultural farms by banks and microfinance institutions By Narcisse Soglohoun
  2. Financial inclusion and energy access: Evidence from Kenya By Mbate, Michael; Fall, El Hadji

  1. By: Narcisse Soglohoun (Chercheur indépendant)
    Abstract: This study aims to identify the determining factors in the decision-making process of financial institutions (FIs) regarding the granting or refusal of agricultural credit in Benin. A quantitative study was conducted between April 2021 and May 2022 to collect data from 52 representatives of FIs, such as agencies or branches of decentralized financial systems, located in the municipalities of Banikoara, Savalou, and Klouékanmè. The results show that 65% of the FIs granting agricultural credits are located in villages, hence close to agricultural operations. In contrast, 21% are located in districts, and 12.5% are situated in municipalities. The proximity of FIs to agricultural operations is a determining factor in their decision to grant agricultural credit. However, only 25% of the FIs granting agricultural credits have significant experience in agricultural financing. Additionally, more than half of the FIs (approximately 68.75%) grant agricultural credits to applicants who also engage in non-agricultural income-generating activities. The analysis of risks related to agricultural production, particularly climate risks and crop pests, also plays a crucial role in the decision-making process of FIs. Indeed, the majority of them (93.75%) assess the likelihood of these risks occurring before granting agricultural credit. Approximately 43% of the FIs granting agricultural credits prioritize material guarantees. In light of these results, it is recommended that FIs adopt an integrated analysis process, supported by advanced digital tools and diversified expertise. This would not only improve risk management but also optimize the profitability of agricultural credits, thereby facilitating greater involvement of FIs in financing the agricultural sector.
    Abstract: La présente étude a pour objectif d'identifier les facteurs déterminants dans la décision des institutions financières (IF) concernant l'octroi ou non d'un crédit agricole au Bénin. Une étude quantitative a été réalisée entre avril 2021 et mai 2022 pour recueillir des données auprès de 52 représentants d'IF, telles que des agences ou des caisses d'un système financier décentralisé, installées dans les communes de Banikoara, Savalou et Klouékanmè. Les résultats montrent que 65 % des IF qui accordent des crédits agricoles sont situées dans des villages, donc proches des exploitations agricoles. En revanche, 21 % sont installées dans les arrondissements, et 12, 5 % dans les communes. La proximité des IF avec les exploitations agricoles constitue un facteur déterminant dans leur décision d'octroyer un crédit agricole. Cependant, seulement 25 % des IF accordant des crédits agricoles possèdent une expérience significative dans le financement agricole. Par ailleurs, plus de la moitié des IF (environ 68, 75 %) accordent des crédits agricoles à des demandeurs ayant en plus une activité génératrice de revenus non agricole. L'analyse des risques liés à la production agricole, notamment les risques climatiques et les ennemis des cultures, joue également un rôle crucial dans la décision des IF. En effet, la majorité d'entre elles (93, 75 %) évalue la probabilité de survenance de ces risques avant d'octroyer un crédit agricole. Environ 43 % des IF qui accordent des crédits agricoles privilégient les garanties matérielles. Face à ces résultats, il est souhaitable que les IF adoptent un processus d'analyse intégré, soutenu par des outils numériques avancés et une expertise diversifiée. Cela permettrait non seulement d'améliorer la gestion des risques, mais aussi d'optimiser la rentabilité des crédits agricoles, facilitant ainsi l'implication accrue des IF dans le financement du secteur agricole.
    Keywords: Bank, microfinance, credit, agriculture, risk, banque, crédit, risque
    Date: 2025–03–14
    URL: https://d.repec.org/n?u=RePEc:hal:journl:hal-05011602
  2. By: Mbate, Michael; Fall, El Hadji
    Abstract: This paper examines the relationship between financial inclusion and energy access, leveraging micro-level survey data from Kenya (2016–2018) and employing propensity score matching to establish causal linkages. The analysis reveals that financial inclusion significantly enhances energy access, with distinct variations across financial institutions and energy types. Financial inclusion operates through three critical mechanisms: increasing households’ willingness to pay for energy, alleviating upfront connection costs via flexible payment schemes, and enabling seamless energy-related transactions through digital platforms. These findings underscore the importance of inclusive financial policies and the role of formal and informal financial institutions as intermediaries in addressing energy poverty.
    Keywords: digital platforms; energy access; energy costs; financial inclusion; propensity score matching; willingness to pay
    JEL: Q40 O13 G21 N27
    Date: 2025–04
    URL: https://d.repec.org/n?u=RePEc:ehl:lserod:127538

This nep-mfd issue is ©2025 by Marco Novarese. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at https://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.