Determinants of Access to Agricultural Credit and Subsidies in the Kwilu Province, Democratic Republic of Congo (Revue Internationale de la Recherche Scientifique (Revue-IRS))

Summary

• Agriculture provides 82.19% of employment in Kwilu Province, but 89% of the population lives in extreme poverty with precarious income due to inadequate financial access.p.2
• The study surveyed 396 agricultural producers and 20 financing institutions in Kwilu Province to assess funding determinants between 2015 and 2024.p.5
• Local NGOs and agricultural professional organizations represent 31.33% of external funding sources for farmers, followed by informal institutions at 26.69%.p.10
• Producers rely on equity for 25.98% of their primary financing, while 74.02% depend primarily on external funding sources.p.11
• Informal credit represents the main funding source for 23.14% of farmers, while local NGO/OPA grants account for 21.09%, and commercial bank credit represents just 4.17%.p.11
• Between 2016 and 2024, 307 farmers received a total of $2,117,319 in loans, with 91.33% allocated to crop season credit and an average repayment rate of 93.17%.p.17

Key insights

1. 1. External funding plays a vital structural role in the region, serving as the primary source of financing for 74.02% of surveyed farms.p.11
2. 2. Repayment capacity has the strongest positive marginal effect on credit access, increasing access probability by 301.4%.p.14
3. 3. Engaging in non-agricultural income-generating activities increases the probability of obtaining credit by 31.05%.p.14
4. 4. Formal collateral increases the probability of obtaining agricultural credit by 28.03%.p.14
5. 5. Organizing into cooperatives or agricultural producer organizations increases the probability of accessing grants by 32.0%.p.15
6. 6. Being a young woman increases the probability of grant access by 10.0%.p.15
7. 7. Administrative formalization of a farm reduces grant access probability by 37.0% in the logit model marginal effects.p.16
8. 8. Commercial banks play a very limited role in direct rural lending, providing only 7.14% of external agricultural funding.p.10