Response of Livestock Farmers to Institutional Credit Use in Pakistan: A Case Study of Bahawalnagar District

Substantial dependence on agricultural production is amongst the common characteristics of developing economies. In such an economic milieu, proper utilization of institutional credit—provided to livestock farmers—could reap multiple benefits for the farming communities. The present study aimed to answer that how come social, economic, and geographical context of a livestock farmer might or might not cause to happen the proper utilization of agricultural credit gained. For empirical analysis, primary information was collected from a sample of 143 farmers residing in the selected district (Bahawalnagar) of southern Punjab. In determining a farmer’s response toward credit use, descriptive statistics exhibited a clear role of the gender and geographical area of the farmer; whereas the findings estimated through logistic regression signified the livestock income, off-farm income, and the herd size as the key credit-use-determinants. The study suggests that for a loaning institute, prior information about a farmer’s income diversification may serve as a proxy to predict his/her credit-use response. In order to improve credit use efficiency, the study also favors the adoption of gender-specific and area-specific approaches for agricultural credit disbursement.