Cotonou: Editions AMP, Cotonou (Bénin)
Low access to financial services is known as a major constraint to development in the agricultural sector of both farms and small entrepreneurs within their value chains. This insufficient access is partly due to the lack of knowledge of the real uses and impacts of such credit upon its borrowers. Farm credit, for example, is expected to have a high rate of default payment due to the high risk of farm activities. Some authors even expect it to have negative effects on some of the farmers and drive them into indebtment. On the other hand, in view of the low access rates many projects, programmes and policies recently try to enhance and support financial services to farmers. Such support with taxpayers’ money which is in competition with other uses of scarce financial resources is based on the assumptions that positive development and economic outcomes and impacts are achieved. In this regard, demonstrating impacts of agricultural finance is an important component of aid effectiveness, including best aid allocation and good practices. This contribution intends to present results of an impact assessment of agricultural credit in Benin. The paper is constructed in 4 parts. A literature review discusses how uncertain and contradictory impacts of credit on welfare may be. The controversy concerning such impacts is partly related to methodological issues which are briefly presented prior to the methods adopted for this study. Major results of the study are then exposed and they are discussed in conclusion.