Take-up and earnings from a livestock financing project in Bangladesh
Smallholder farmers in low- and middle-income countries often encounter significant challenges in accessing financial services, primarily due to the limited presence of formal financial institutions in rural areas (DemirgüçKunt et al., 2022). These challenges are compounded by factors such as the hi...
| Autores principales: | , , , |
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| Formato: | Brief |
| Lenguaje: | Inglés |
| Publicado: |
CGIAR System Organization
2024
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/168422 |
| _version_ | 1855539836621946880 |
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| author | Ambler, Kate Bakhtiar, M. Mehrab de Brauw, Alan Uddin, Mohammad Riad |
| author_browse | Ambler, Kate Bakhtiar, M. Mehrab Uddin, Mohammad Riad de Brauw, Alan |
| author_facet | Ambler, Kate Bakhtiar, M. Mehrab de Brauw, Alan Uddin, Mohammad Riad |
| author_sort | Ambler, Kate |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Smallholder farmers in low- and middle-income countries often encounter significant challenges in accessing financial services, primarily due to the limited presence of formal financial institutions in rural areas (DemirgüçKunt et al., 2022). These challenges are compounded by factors such as the high costs and risks associated with financing small, dispersed farms and the farmers’ lack of collateral (Barrett et al., 2022; Dorward et al., 2009). Despite the emergence of microfinance as a tool to bridge this gap, the rigid repayment structures required by most microfinance institutions frequently clash with the seasonal nature of agricultural production, creating financial strain for farmers (Armendáriz and Morduch, 2010). These challenges underscore the need for more flexible and tailored financial solutions for smallholder farmers.
The private sector can address some of these challenges by developing innovative financial products that manage risk and transaction costs in novel ways. In this study we collaborate with WeGro, a Bangladeshi firm seeking to develop such innovations, to evaluate a finance model designed for smallholder farmers raising livestock for fattening. WeGro employs a profit-sharing model that seeks to spread the risk between the company and the farmer, while at the same time collateralizing the loan with the asset itself to limit the risk for the financing company. We evaluate an expansion of WeGro’s profit sharing model for livestock fattening and compare it to a standard loan contract through a randomized control trial conducted in 105 villages in northwestern Bangladesh. The design and implementation of this study are detailed in Ambler et al. (2023). In this brief, we discuss intervention take-up in the treatment groups, and farmer and company earnings when the financial product is adopted by farmers. |
| format | Brief |
| id | CGSpace168422 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2024 |
| publishDateRange | 2024 |
| publishDateSort | 2024 |
| publisher | CGIAR System Organization |
| publisherStr | CGIAR System Organization |
| record_format | dspace |
| spelling | CGSpace1684222025-01-07T18:40:33Z Take-up and earnings from a livestock financing project in Bangladesh Ambler, Kate Bakhtiar, M. Mehrab de Brauw, Alan Uddin, Mohammad Riad livestock financing markets Smallholder farmers in low- and middle-income countries often encounter significant challenges in accessing financial services, primarily due to the limited presence of formal financial institutions in rural areas (DemirgüçKunt et al., 2022). These challenges are compounded by factors such as the high costs and risks associated with financing small, dispersed farms and the farmers’ lack of collateral (Barrett et al., 2022; Dorward et al., 2009). Despite the emergence of microfinance as a tool to bridge this gap, the rigid repayment structures required by most microfinance institutions frequently clash with the seasonal nature of agricultural production, creating financial strain for farmers (Armendáriz and Morduch, 2010). These challenges underscore the need for more flexible and tailored financial solutions for smallholder farmers. The private sector can address some of these challenges by developing innovative financial products that manage risk and transaction costs in novel ways. In this study we collaborate with WeGro, a Bangladeshi firm seeking to develop such innovations, to evaluate a finance model designed for smallholder farmers raising livestock for fattening. WeGro employs a profit-sharing model that seeks to spread the risk between the company and the farmer, while at the same time collateralizing the loan with the asset itself to limit the risk for the financing company. We evaluate an expansion of WeGro’s profit sharing model for livestock fattening and compare it to a standard loan contract through a randomized control trial conducted in 105 villages in northwestern Bangladesh. The design and implementation of this study are detailed in Ambler et al. (2023). In this brief, we discuss intervention take-up in the treatment groups, and farmer and company earnings when the financial product is adopted by farmers. 2024-12-30 2024-12-31T15:31:27Z 2024-12-31T15:31:27Z Brief https://hdl.handle.net/10568/168422 en https://doi.org/10.2499/p15738coll2.137043 Open Access application/pdf CGIAR System Organization Ambler, Kate; Bakhtiar, M. Mehrab; de Brauw, Alan; and Uddin, Mohammad Riad. 2024. Take-up and earnings from a livestock financing project in Bangladesh. CGIAR Initiative on Rethinking Food Markets Initiative Note. CGIAR System Organization. https://hdl.handle.net/10568/168422 |
| spellingShingle | livestock financing markets Ambler, Kate Bakhtiar, M. Mehrab de Brauw, Alan Uddin, Mohammad Riad Take-up and earnings from a livestock financing project in Bangladesh |
| title | Take-up and earnings from a livestock financing project in Bangladesh |
| title_full | Take-up and earnings from a livestock financing project in Bangladesh |
| title_fullStr | Take-up and earnings from a livestock financing project in Bangladesh |
| title_full_unstemmed | Take-up and earnings from a livestock financing project in Bangladesh |
| title_short | Take-up and earnings from a livestock financing project in Bangladesh |
| title_sort | take up and earnings from a livestock financing project in bangladesh |
| topic | livestock financing markets |
| url | https://hdl.handle.net/10568/168422 |
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