Agricultural credit under economic liberalization and Islamization in Sudan
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Date
1998-02-05
Authors
Elhiraika, Adam B.
Ahmed, Sayed A.
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
This study uses survey data to examine the operations of the agrarian credit market,
formal and informal, in Sudan under conditions of recent economic liberalization and
Islamization; the latter does not allow interest rate fixing. In addition to descriptive
analysis, the study specifies and estimates a model of farm household participation in the
credit market. The survey results show a substantial increase in formal borrowing in
agriculture, but relatively low informal credit. Implicit interest rates are found to be high
in the formal segment compared with their previous levels, and the levels of formal and
informal agrarian rates of interest are comparable. The research concludes that there is a
need for enhanced institutional financial intermediation in the agrarian credit market as
well as scope for the promotion of savings and credit associations among farmers.