Effects of international fund transfers on the use of credit by farmers in Mali

Abstract

The purpose of this paper is to analyze the effects of remittances from inter- national migrants on the use of credit by farmers in Mali. The propensity score method was used to correct the endogeneity associated with remittances. The study concerns 9040 farmers whose data come from the survey of Agricultural Integrated Market for the 2017-2018 crop year. The results reveal a lack of effect of remittances on the use of global credit by farmers. However, the results according to the sources show a negative effect for formal credit due to input and seed credit from the Malian Textile Development Company (CMDT). Institutional (banking and microfinance) and informal loans were not significant. This lack of effect, on the part of institutional lenders, is linked to the non-use of the chan- nel of formal lenders for remittances and the high level of risk of agricultural activity, on the one hand, and the inability of financial institutions to develop products adapted to the needs of farmers. On the side of the informal lenders, it is justified by the insufficiency of the amounts of the transfers obliging the operators to always resort to this market.(original abstract)