Access to Credit and Farm Productivity: Heterogeneous Effects Across Credit Sources in Indonesia
Year: 2026
Type: article
Abstract: Background: Seasonal horticultural farmers in Indonesia face high production risks, seasonal cashflow constraints, and limited access to productive financing, despite the sector's importance for rural income and high-value agricultural supply. Purpose: This study examines the impact of credit access on the economic productivity of seasonal horticultural farmers, with particular emphasis on heterogeneous effects across credit sources. Design/methodology/approach: Using nationally representative microdata from the 2018 Horticulture Cost Structure Survey covering 41,167 farmers, this study distinguishes informal credit, formal non-bank credit, and formal bank credit. Inverse probability-weighted regression adjustment (IPWRA) is applied to estimate the average treatment effect on the treated, while propensity score matching (PSM) is used as a robustness check. Findings/Result: Credit access significantly improves farm productivity, but the magnitude differs by source. Formal bank credit generates the largest and most robust productivity gains, followed by formal non-bank credit, while informal credit shows no statistically robust effect after selection adjustment. However, only 5.2% of farmers access credit. Conclusion: Expanding suitable formal credit can unlock substantial productivity potential in horticulture. Originality/value: This study provides source-specific evidence on agricultural credit impacts using nationally representative horticultural data.
Source: Jurnal Manajemen dan Agribisnis
Institutions: Badan Pusat Statistik, IPB University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $52
OpenAlex ID: W7214620403