Abstract
The effects of bank loans and access to formal financial institutions on rural economic growth and farmers’ welfare in all provinces in Indonesia have not been previously comprehensively documented with accurate, scientific methodology. This study examines the relationship of bank loans to the Farmers’ Terms of Trade and also provides a comprehensive analysis on some control variables such as inflation and agricultural sector productivity. The results show that bank loans do not significantly affect the welfare of farmers. Inflation and farmers’ welfare have an inverted U shape pattern and relationship which indicates that while low inflation rates are positively related to farmer's welfare; higher inflation rates will drastically decrease the level of welfare.
| Original language | English |
|---|---|
| Pages (from-to) | 23-30 |
| Number of pages | 8 |
| Journal | Asian Development Policy Review |
| Volume | 7 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2019 |
Keywords
- Agriculture
- Bank loan
- Farmers’ welfare
- Inflation
- Productivity
- Rural
