Women's access to credit affects efficiency in rural households

Jul 25, 2008

Rural strategies designed to induce economic growth often emphasize the need to improve access to capital for poor households. However, this approach implicitly assumes that family members pool all their resources and allocate them to their most efficient use. Men and women may differ in their access to credit and may choose not to alleviate their partners' constraints.

A new study in the American Journal of Agricultural Economics shows how rural households in which women are not able to meet their needs for capital do not produce as much as they could.

Diana Fletschner, PhD, of the University of Washington utilized information from a survey to assess individual access to credit of husbands and wives in 210 rural households.

Data analysis showed that households in which women are reportedly unable to meet their credit needs are not producing as much as they could. The costs of these constraints to society are substantial, because for the average family, the woman's constraints are associated with an 11 percent loss in efficiency.

Consequently, policies and programs designed to promote economic growth must address obstacles that limit access to credit for poor women, not just for poor households. Studies that are based solely on the household's head may significantly underestimate the true economic impact of credit constraints.

"The study shows that there are economic arguments for enhancing women's access to capital," Fletschner concludes. "Policies and programs that improve women's access to credit would in turn lead to more efficient allocation of resources and increased production."

Source: Wiley

Explore further: Super Bowl athletes are scientists at work

add to favorites email to friend print save as pdf

Related Stories

Firing up bright sparks in African business

Jan 13, 2015

An Oxford University report has systematically examined how the ingenuity of African entrepreneurs is being supported. It found while government schemes and policies are in place to support Ghanaian businesses, ...

How will Google, Apple shake up car insurance industry?

Dec 22, 2014

Car insurance industry, meet potential disrupters Google and Apple. Currently, nearly all mainstream insurers that offer driver-monitoring programs use relatively expensive devices that plug into a portal under the dashboard. ...

Web inventor says Internet should be 'human right'

Dec 11, 2014

The computer scientist credited with inventing the World Wide Web says affordable access to the Internet should be recognized as a human right, as a report showed that billions of people still cannot go online and government ...

Recommended for you

Super Bowl athletes are scientists at work

9 hours ago

Seattle Seahawks cornerback Richard Sherman gets called a lot of things. He calls himself the greatest cornerback in the NFL (and Seattle fans tend to agree). Sportswriters and some other players call him ...

Sundance doc examines real-life Close Encounter

Jan 29, 2015

Earth authorities are completely unprepared for the arrival of alien visitors and worried humans should ready themselves by watching a groundbreaking documentary, the film's director boasts.

Toward a scientific process freed from systemic bias

Jan 26, 2015

Research on how science works - the science of science - can benefit from studying the digital traces generated during the research process, such as peer-reviewed publications. This type of research is crucial for the future ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.