Access to Credit and Firm Ownership in South Africa

2006 ◽  
Author(s):  
George R. G. Clarke ◽  
Robert Cull
Keyword(s):  
South Africa ◽  
Access To Credit ◽  
Firm Ownership

scholarly journals The implications of Truworths Limited v Minister of Trade and Industry 2018 (3) SA 558 (WCC) for access to credit by historically disadvantaged and low-income consumers

2019 ◽  
Vol 23 ◽  
Author(s):  
Tinashe Wazvare Mhaka ◽  
Patrick C. Osode
Keyword(s):  
South Africa ◽  
Low Income ◽  
Credit Market ◽  
Financial Inclusion ◽  
Access To Credit ◽  
Responsible Lending ◽  
Historically Disadvantaged ◽  
Optimal Approach ◽  
National Credit Act ◽  
Low Income Consumers

ABSTRACT The problem of safe and affordable credit for low-income consumers has remained a conundrum for policy makers. More pointedly, sustainable participation of historically disadvantaged and low-income consumers in the mainstream credit market has proved to be problematic in South Africa. Despite the introduction of the National Credit Act 34 of 2005 ("NCA") numerous South Africans are still trapped in debt. To alleviate this problem the NCA was amended by the National Credit Amendment Act 19 of 2014 ("NCAA") to promote responsible lending and borrowing. Nonetheless, certain regulations that were promulgated under the NCAA were challenged in Truworths v Minister of Trade and Industry 2018 (3) 558 (WCC) ("Truworths") on the basis that they discriminated against the informally employed and financially excluded since they require consumers to provide bank statements, pay slips or financial statements as proof of income. This article presents a reflective appraisal of Truworths in the light of its support for access to credit by those on the peripheries of South Africa's credit market. Although the authors applaud the decision in Truworths as having the potential to open up the credit market to the financially excluded, they also raise concerns about whether striking down regulations that encourage consumers to open bank accounts is the optimal approach to promoting financial inclusion in South Africa. Keywords: National Credit Act; Financial inclusion; Over-indebtedness; Historically disadvantaged individuals; Low-income consumers; Affordability assessment regulations; Reckless lending

scholarly journals Trends In Credit To Smallholder Farmers In South Africa

2012 ◽  
Vol 11 (7) ◽  
pp. 771 ◽  
Author(s):  
Joseph Chisasa ◽  
Daniel Makina
Keyword(s):  
South Africa ◽  
Developing Countries ◽  
Poverty Alleviation ◽  
Agricultural Sector ◽  
Smallholder Farmers ◽  
Policy Implications ◽  
Bank Credit ◽  
Smallholder Farmer ◽  
Access To Credit ◽  
Before And After

Access to credit for smallholder farmers remains a challenge in most developing countries. This paper examines the trend and pattern of bank credit to smallholder farmers in South Africa, both before and after the attainment of democratic government. The analysis of the trend and pattern of bank credit to smallholder farmers was conducted within the confines of the same agricultural sector, across all economy sectors and in relation to GDP. Our analyses show that bank credit to smallholder farmers is (and continues to be) a small fraction of total credit to the private sector and is a very small proportion of GDP. The smallholder farmer sector is observed to face the same constraints to credit as SMEs, a category of enterprises to which they also belong. In light of the importance of agriculture, in general, and smallholder farmers, in particular, to South Africas poverty alleviation and food security drive, our results have important policy implications.

scholarly journals Psychological capital and climate change adaptation: Empirical evidence from smallholder farmers in South Africa

2021 ◽  
Vol 13 (1) ◽  
Author(s):  
Unity Chipfupa ◽  
Aluwani Tagwi ◽  
Edilegnaw Wale
Keyword(s):  
Climate Change ◽  
South Africa ◽  
Social Networks ◽  
Climate Change Adaptation ◽  
Cognitive Abilities ◽  
Psychological Capital ◽  
Smallholder Farmers ◽  
Probit Regression ◽  
Access To Credit ◽  
Common Framework

There are calls for better empirical models to inform climate change adaptation in smallholder agriculture. Hitherto adaptation studies have failed to comprehensively integrate non-cognitive behavioural factors (e.g. psychological capital), and there is also no common framework for measuring non-cognitive abilities of smallholder farmers. Hence, this study is the first attempt to assess how psychological capital affects climate change adaptation amongst smallholder farmers. The study estimated the multivariate probit regression model using data collected from 328 smallholder farmers in KwaZulu-Natal province, South Africa. The results show an association between some psychological capital indicators and smallholder adaptation decisions. Social networks, having multiple farming objectives, access to credit and the type of farmer (irrigators vs. non-irrigators) were also significant in determining smallholders’ adaptation decisions. In conclusion, the study recommends the need for practical ways for enhancing smallholders’ endowment with key non-cognitive abilities. There is also a need for researchers to develop a comprehensive framework for assessing non-cognitive factors critical for climate change adaptation. This will improve the use of positive psychology theories to advance the literature on climate change adaptation. Support should also be provided to communities facing higher risks of climate change adaptation. More focus should also be given to improve smallholder farmers’ ability to adapt, including access to affordable credit. The role of social networks in information sharing remains critical, and hence their promotion should be prioritised. The findings on multiple objectives in farming were unique to climate change adaptation research, and hence the indicator should be considered in future similar studies.

scholarly journals Analysing challenges facing smallholder farmers and conservation agriculture in South Africa: A system dynamics approach

2016 ◽  
Vol 19 (5) ◽  
pp. 747-773 ◽  
Author(s):  
Wolfgang Von Loeper ◽  
Josephine Musango ◽  
Alan Brent ◽  
Scott Drimie
Keyword(s):  
South Africa ◽  
System Dynamics ◽  
Value Chain ◽  
Smallholder Farmers ◽  
Conservation Agriculture ◽  
Research Data ◽  
Ethnographic Research ◽  
Structured Interviews ◽  
Ongoing Research ◽  
Access To Credit

Smallholder farmers in South Africa find it challenging to participate in the modern economy. Most of these farmers have limited access to credit and insurance, and to markets in which to sell their produce. This paper reviews ethnographic research data and argues that smallholder farmers struggle to take part in modern agricultural value chains in South Africa. System dynamics modelling is used to understand the dynamics relating to agricultural value-chain participants, and to determine whether the ethnographic research data is sufficient to answer the question as to which value-chain participants potentially have the largest impact on smallholder farmers. The modelling results show that banks may have the potential to trigger an impact on smallholder farmers’ productivity that could then attract other value-chain industries to take part in efforts to support these farmers. Smallholder farmers could become a long-term viable and sustainable option for increasing food security in South Africa. However, this study has its limitations. The data used from existing ethnographic research, conducted by way of semi-structured interviews with valuechain participants, is limited and is not able to answer questions such as: (i) how much each industry is prepared to engage with smallholder farmers in the event of other industries being prepared to do the same; and (ii) how long it will take each industry to react to a willingness to engage. Ongoing research is required to extend the interviewee base and data in order to answer these questions and for the model to be completed and used for policy guidance.

scholarly journals Investigating smallholder farmers’ exclusion from credit markets in South Africa

2015 ◽  
Vol 5 (3) ◽  
pp. 235-245
Author(s):  
Joseph Chisasa
Keyword(s):  
South Africa ◽  
Financial Services ◽  
Credit Markets ◽  
Smallholder Farmers ◽  
Descriptive Analysis ◽  
Financial Policies ◽  
North West ◽  
Access To Credit ◽  
Family Culture ◽  
Development Goals

Access to credit by smallholder farmers in South Africa has been empirically observed to be characterised by a variety constraints. This paper examines the demographic, financial and economic characteristics of smallholder farmers in order to gain a better understanding of why smallholder farmers are excluded from formal credit markets. The paper uses survey data collected from 362 smallholder farmers randomly selected from Mpumalanga and North West Provinces of South Africa. Using descriptive analysis, the paper observes that smallholder farmers have low annual turnover, low demand for credit and often with a family culture not to borrow. The paper concludes that smallholder farmers in South Africa are still financially excluded, particularly from the formal banking systems. Results of this paper demonstrate a need for a review of financial policies in favour of increasing the supply of financial services, particularly credit to smallholder farmers if South Africa is to achieve its Millenium Development Goals of employment creation and poverty alleviation.

scholarly journals Determinants of Access to Formal Credit by the Poor Households

2017 ◽  
Vol 62 (1) ◽  
pp. 50-60 ◽  
Author(s):  
Mduduzi Biyase ◽  
Bianca Fisher
Keyword(s):  
South Africa ◽  
Poverty Reduction ◽  
Household Head ◽  
National Income ◽  
Geographic Location ◽  
International Standards ◽  
Heckman Selection Model ◽  
Access To Credit ◽  
Poor Households ◽  
Primary Means

Abstract This paper investigates the determinants of access to formal credit by poor households in South Africa. Despite some progress in poverty reduction in the recent years, it remains astonishingly high by historical and international standards. Access to credit is believed by some scholars to be a primary means to address poverty and improve the standards of living of poor households. Thus, it is necessary to identify the determinants of the propensity to borrow and of the amount that is borrowed. Using 2008-2012 data from the National Income Dynamics Study (NIDS), a Heckman Selection model was estimated. The results from this study suggest that age of the household head, race, educational level, gender, employment, geographic location of households affect the propensity to borrow by poor households in South Africa.

scholarly journals Gender disparities in poverty among smallholder livestock farmers in south africa

2020 ◽  
Vol 48 (2) ◽  
Author(s):  
M. Maziya ◽  
P. Tirivanhu ◽  
R.J. Kajombo ◽  
N.A. Gumede
Keyword(s):  
South Africa ◽  
Household Head ◽  
Well Being ◽  
Gender Disparities ◽  
Gender Mainstreaming ◽  
Farm Income ◽  
Extension Services ◽  
Access To Credit ◽  
Binary Logit ◽  
Livestock Farmers

ABSTRACT This paper analyses gender disparities in poverty and the determinants of poverty among smallholder communal livestock farmers across five provinces in South Africa. A combination of multi-stage and stratified sampling techniques were used to select 591 farmers across the provinces. The Foster, Greer and Thorbecke (FGT) poverty indices were used to determine the extent and severity of poverty among smallholder livestock farmers. The results of the FGT analysis revealed that poverty is prevalent among smallholder livestock farmers but more pronounced among female-headed households. A binary logit regression was used to determine the predictors of poverty among communal livestock owners. Factors such as level of education, gender of household head, access to markets and extension services reduce the probability of a household becoming poor. Conversely, factors such as household size and access to credit had a negative effect on household well-being. These results highlight the importance of strengthening institutions (extension, livestock farmer organisations and markets) to improve smallholder livestock systems. Further, the study recommends that agricultural extension services should integrate gender mainstreaming in interventions that target smallholder communal livestock farmers, and that rural development projects should focus on interventions that aim at diversifying farm income. Keywords: Binary logit, FGT poverty index, South Africa

scholarly journals ANALYSIS OF PROFITABILITY OF SMALLHOLDER IRRIGATED FOOD PLOTS IN THE EASTERN CAPE PROVINCE OF SOUTH AFRICA

2019 ◽  
Vol 53 (3) ◽  
Author(s):  
Lelethu Mdoda ◽  
Ajuruchukwu Obi
Keyword(s):  
South Africa ◽  
Crop Production ◽  
Poverty Reduction ◽  
Eastern Cape Province ◽  
Eastern Cape ◽  
Gross Margin ◽  
Access To Credit ◽  
Poor Households ◽  
Crop Farming ◽  
Food Plots

Smallholder irrigation farming is transformative to poor households as they improve livelihoods and alleviate poverty but little has been done to quantify their profitability. The present study assessed the profitability of smallholder irrigated crop farmers in the Eastern Cape Province of South Africa and ascertained their determinants. A multi-stratified technique was employed to select 120 smallholder irrigated crop farmers. Data were analysed using gross margin and multiple regression models. Results showed that crop production is profitable. Farm experience, years spent in school, access to credit, distance to markets, and tractor use were found to have a bearing on the profitability of the irrigated crop farmers. Based on the results, crop farming is identified as crucial for jobs and poverty reduction.  

scholarly journals Improving the Food and Nutritional Security of Smallholder Farmers in South Africa: Evidence from the InnovAfrica Project

2021 ◽  
Vol 13 (17) ◽  
pp. 9902
Author(s):  
Lindumusa Myeni ◽  
Mokhele Edmond Moeletsi ◽  
Isaiah Nyagumbo ◽  
Salome Modiselle ◽  
Lebohang Mokoena ◽  
...  
Keyword(s):  
South Africa ◽  
Crop Yields ◽  
Agricultural Research ◽  
Smallholder Farmers ◽  
Lessons Learned ◽  
African Countries ◽  
Nutritional Security ◽  
Access To Credit ◽  
The Government ◽  
Food And Nutritional Security

This article highlights evidence and lessons learned from the InnovAfrica project conducted by the Agricultural Research Council in collaboration with other international organizations between 2017 and 2021. This project aimed to test and upscale best-bet Sustainable Agricultural Intensification (SAI) practices through Multi-Actor Platforms (MAPs) and improved dissemination strategies across six African countries (viz. Ethiopia, Kenya, Malawi, Rwanda, South Africa and Tanzania). The goal of the project was to improve the food and nutritional security of smallholder farmers in Africa. The article briefly discusses some of the key challenges that smallholder agriculture is facing, results from the agricultural interventions brought in by the InnovAfrica project, evidence-based actions and policy recommendations to improve the sustainable agricultural productivity of smallholder farmers in the South African case study. The study showed that SAI practices increased crop yields and build climate-resilient farming communities. It is recommended that the promotion of SAI practices should be supported by enabling institutions and conducive policies that will enhance access to inputs, market linkages, improved access to credit and good agricultural lands, the establishment of functional farmer groups and participatory learning models. These recommendations can be used by the government and other agencies to develop effective interventions to improve food and nutrition security.

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