Analysis of Determinants of Access to Credit for Cotton Producers in Mali

Abstract

This research analyzed the determinants of cotton producers’ access to credit for in the areas of the Malian Textile Development Company (CMDT). Primary data collection was carried out using questionnaires submitted to 400 producers through multistage stratified sampling procedure (zones and types of farms constituting the strata). The data were analyzed using descriptive statistics and logit model. The values measuring the overall significance of the model are of the order of: Wald's test statistic chi2 = 68.98, Area under the ROC curve = 0.68 and Model good prediction rate = 71.03%. The binomial logit model showed that the significant variables (at the 15% level) affecting cotton producers’ access to credit are age, marital status, level of education, income, interest rate, existence of material collateral and type of farm. It is therefore recommended that the financial institutions, CMDT and the Producers' Cooperatives be enhanced working together for an interest rate set at levels that take into account the sustainability of the credit institutions and managing communication around a fixed interest rate in order to avoid confusion for employees and cotton producers; making less restrictive the conditions for cotton producers to obtain credit for, so that those who do not have access can benefit from credit; revitalizing producers’ training level to enable better management of farm credit by the beneficiaries; setting up an insurance mechanism for cotton producers to cover unpaid debts due to natural climatic hazards and encouraging the population to grow cotton since the increase in active members on the farm has a positive influence on the chances of having access to credit.