Land titles and formal credit in Thailand
2016
Sakprachawut, Soontaree | Jourdain, Damien | Centre de Coopération Internationale en Recherche Agronomique pour le Développement (Cirad) | Gestion de l'Eau, Acteurs, Usages (UMR G-EAU) ; Centre de Coopération Internationale en Recherche Agronomique pour le Développement (Cirad)-Institut de Recherche pour le Développement (IRD)-AgroParisTech-Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement (INRAE)-Institut Agro - Montpellier SupAgro ; Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement (Institut Agro)-Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement (Institut Agro)
International audience
Show more [+] Less [-]English. Purpose – The purpose of this paper is to investigate the effects of land titles and farmers’ characteristics on their participation in the formal credit market in a land reform area of Thailand. Design/methodology/approach – Data collected on 218 farm households in one land reform area of Western Thailand are analyzed with a generalized double-hurdle model to calculate the probability of farm households to take a loan and the size of the loans from a formal credit institute, the Bank for Agriculture and Agricultural Co-operatives. Findings – The results suggest that the absence of a title, whether fully or partially transferable, decreases significantly the participation to the formal credit market and the size of the loans. However, this effect was small. The findings also indicate that the farm assets, household head’s gender and age, and the labor force per hectare were significantly influencing the probability of participation to borrow money as well as the amount borrowed. Practical implications – The possibility given to farmers having title with partial transferability to provide alternative types of guarantees reduced the gap in loan-taking between the different types of land title. However, the presence of a land title, transferable or not, had a significant influence on farmers demand and success in obtaining credit. Originality/value – The paper investigates the possible effects of a unique partial land rights in Thailand that guarantees only security of use of the land but prohibits sale.
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