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Determinants of The Demand for Agricultural Credit
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Abstract: ـــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــ
• Egyptian Journal of Agricultural Economics. Egyptian Association of Agricultural Economics. Vol.(26), No.(4), December 2016.
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Agricultural credit is one of the most important agricultural investment funding sources in Egypt, where the banking system collects domestic savings surplus sectors and redistribute them back on the economic units that have a deficit in the form of a credit. No longer confined to remove some of the obstacles or the treatment of all or some of the financing problems facing small farms and the product during production processes. But credit has become a major contributor to the modernization of agriculture, and expand production, increase product and by adopting modern technology financing costs. It is no secret to the specialists of planning, implementation, and there are many difficult problems was the lack of availability of finance and credit needed for small-scale farmers and producers due to the meager farm capacity and thus low per capita incomes resulting in twice the estimated savings and the possibility of self-funding the farmers, in addition to the fact that the vast majority of them do not have the traditional collateral required by the bank credit operations, and granted agricultural loan volume is disproportionate to the continuing costs of production and marketing increase different plant for Cereals which increases the importance of borrowing to provide the needs of agricultural inputs throughout the year, and the deviation of the current use of agricultural loans for the use for which it spent these loans, in addition to funding down to the level of small farmers has become something of costly physical and administrative terms according to the rules of banking, financial and economic fundamentals. Hence the problem of the study to what extent influenced by the demand for agricultural credit volume in the light of those difficulties? And then targeted search demand for agricultural credit structure analysis by studying the determinants of the demand for agricultural credit and then predict the expected size of the agricultural credit demand.
The research concluded that there is a decline in the relative importance of investment loans to total agricultural loans during the period (1999 / 2000-2014 / 2015) from about 70.3% in 99/2000 to 48.9% in 2009/2010 and then increased to about 65.6% in 2014 / 2015 and an average annual estimated at 65.6%. While representing the relative importance of agriculture loans to total agricultural loans approximately 29.7% in 99/2000 increased to about 34.4% in 2014/2015 with an average annual estimated at 33.5%, and some believe that the decline in demand for agricultural credit in the form of loans the size of crops due the difficulty of banking procedures, or failure of some of the farmers, or to guide them towards borrowing from other means, it turns out that the estimates of indicators to measure the impact of the credit to the agricultural output that the value of monetary stability coefficient has taken were negative in some years of study, estimated at -0.364, -0.09, -0.15, -0.98, -0.85, -0.20, which means a contraction of loans granted to the agriculture sector as a result of the size of the interest rate liberalization and the elimination of subsidies by the credit policies. While the value of monetary stability coefficient in some years less than the right one study, suggesting the existence of a state of deflation any increase agricultural output volume of the investigator at a higher rate of increase in credit extended to the agriculture sector. While the indicated value of the monetary stability coefficient during the rest of the period to the existence of a state of inflation, which means that the annual rate of credit exceeds the annual average relative agricultural output, has estimated results showed that the most important factors affecting the demand for vegetable production loans are in demand for vegetable production loans in the year previously, GDP Agriculture, the total area under cultivation, the public agricultural investment, private agricultural investment, total credit to the agricultural sector, while the most important factors affecting the demand for agricultural investment loans short term is in the medium-term agricultural investment loans, total credit to the agricultural sector, the private agricultural investment, the real interest rate on investment loans short term, crop area.
Recommendations:
1- It’s necessary for the central bank to take a package of measures to help in the promotion of the credit process, such as a review of credit facilities granted and obstacles facing the credit process in terms of facilitating the procedures, reducing the interest rate on long-and medium-sized investment lending rates to encourage many who are interested in borrowing, reduce administrative expenses.
2 Credit modern technology and agricultural extension linking leading to increased crop productivity and thus increase farm income and increase its ability to repay.
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| URL |
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| Publication year |
2016
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| Availability location |
مكتبة معهد بحوث الاقتصاد الزراعي-7 ش نادى الصيد - مبنى الهيئات والشركات - الدقي- الجيزة (الدور الرابع)
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| Organization Name |
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| City |
الجيزة
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| serial title |
المجلة المصرية للاقتصاد الزراعى
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| Author(s) from ARC |
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| Publication Type |
Journal
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