African Journal of
Agricultural Research

  • Abbreviation: Afr. J. Agric. Res.
  • Language: English
  • ISSN: 1991-637X
  • DOI: 10.5897/AJAR
  • Start Year: 2006
  • Published Articles: 6691

Full Length Research Paper

Impact of international donor organizations’ intervention on agricultural banking in Africa: Micro analyses

Giorgi Kharshiladze
  • Giorgi Kharshiladze
  • University of Rome Tor Vergata, Italy
  • Google Scholar


  •  Received: 22 February 2015
  •  Accepted: 22 December 2015
  •  Published: 31 December 2015

Abstract

The major part of African countries population lives in the rural areas and agriculture is the main source of such dwellers’ livelihood. Access to agricultural credit is a milestone in the context of rural development of these countries. International donor organizations give some banks impetus to direct their loans to agricultural sector. This study tries to make motion about analyzing micro consequences of international donors’ intervention in a number of banks of observed African states in terms of agricultural loan volumes. In particular, it analyzed selected banks that provide agricultural loans. Donors were related with some banks as they were providing relevant resources that banks were using for financing agricultural loans within the specific projects with them. Such banks were identified and those with no relevant nexus with donors; also their agricultural loan portfolios were compared and how they changed over time. Statistical analyses showed whether donors’ role was significant in issuing agricultural loans or other factors were more important. Bank level analyses try to answer the following research question: do international donor organizations’ loans and grants to banks increase supply of agricultural credit from banks? Selected bank specific variables were used for empirical analyses. Results show that international donor organizations have positive impact on African banks’ agricultural lending volume. It can be also stated that both in donor related and non related banks deposits play important role in the issue of agricultural loans, while interest rate on agricultural lending stay insignificant in both cases.
 
Key words: International donor organizations, agricultural banking, agricultural lending.