Building Capability of Vulnerable Farmers through Agricultural Credit and Its Contributing Factors in Natore, Bangladesh

Akter, Morium; Sarker, M. Mizanur Rahman (2016). 'Building Capability of Vulnerable Farmers through Agricultural Credit and Its Contributing Factors in Natore, Bangladesh' Paper presented at the annual conference of the HDCA, Tokyo 2016.

Ensuring adequate food as opposed to growing population thus is a great challenge for Bangladesh. Adoption of modern agricultural methods includes huge capital investment which the poor and marginal farmers lack. So, it can obviously be said that the provision of farm credit for production purposes is inevitable for agricultural development in the country. Credit is thought to be the crucial element in bringing about desired change in agricultural production that ultimately would contribute to economic development of the country. This paper addresses the topic from a capability approach perspective by using local micro data to measure the impact of the agricultural micro credit on vulnerable farmers and to simulate the impact of public policies. Four villages namely Kaemkola, Ahmedpur , Tirail and Masgram of  Baraigram upozila of Natore district were selected purposively. Farmers considered respondents in the present study assumed to have taken loan from different sources of micro credit available close to the study area. One hundred twenty (120) vulnerable farmers are selected randomly. The study was mainly based on a set of field level primary data collected from the selected members by using pretested interview schedules. Field level primary data were collected from the selected respondents through direct interview conducted by the researcher herself. Descriptive and inferential techniques were used to analyze the result. Most of the farmers need not to be so dependent at present on money lenders and other non-institutional sources of credit. Large and medium farmers were the major beneficiaries of public and private banks compared to small farmers because of their ability to offer collateral against loan. Member based institutions (GB and other NGOs) however, took care of these people in the study area.  A lion’s share of loaned money obtained has been productively utilized by the sampled respondents implying the borrower’s positive attitude towards productive use of credit. The results indicate that the average monthly incoming is increasing as well as average saving of the farmers also positive at the end of the year. Wives’ participation in decision making process has increased. Farm size, education, gender and income of borrowers were observed to influence significantly for building the capability of vulnerable farmers through microcredit. These findings have several implications to those agencies and policy initiatives operating at local and national levels concerned with agricultural credit policies, structure, efficient credit and banking system and related problems those are primarily concerned with sustainable rural development and poverty alleviation agenda.

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