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The Impact of Inventory Credit on Food Security and Rural Livelihoods in Burkina Faso

The Impact of Inventory Credit on Food Security and Rural Livelihoods in Burkina Faso

Access to rural finance is considered a key tool to reduce poverty among farmers, yet existing microcredit models have shown limited capacity to increase profitability for these farmers. Improved approaches may address the behavioral constraints that farmers face, such as the temptation to sell when cash is needed but prices for crops are low. This study with farming communities in Burkina Faso found that inventory credit, or warrantage communautaire, significantly increased consumption and savings as well as and investment in agricultural inputs and education, though impacts on food security were only short-lived. The results suggest that inventory credit is an effective way of boosting agricultural and non-agricultural investment for farmers in places with weak financial markets.

Download (3 p.) : http://www.poverty-action.org/printpdf/7696


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