Formal credit usage and gender income gap: the case of farmers in Cambodia
ISSN: 0002-1466
Article publication date: 19 January 2021
Issue publication date: 29 September 2021
Abstract
Purpose
The purpose of this article is to analyze the factors that drive gender income differences among farmers in Cambodia with a focus on the role of formal credit.
Design/methodology/approach
To decompose the gender income gap, this article employs the Blinder–Oaxaca decomposition technique, while a two-stage least square (2SLS) regression is also employed to check the causal effect of formal credit usage on earnings.
Findings
Results show a positive effect of formal credit on farmers' earnings and the gender gap in formal credit usage is not found. Despite that, formal credit still contributes to the gender earnings gap with a higher return to credit usage for male farmers. This can be due to the difference in the level of education, financial literacy and other dimensions in favor of men, allowing them to use credit more effectively than women.
Research limitations/implications
The findings underline the importance of boosting general and financial education among female farmers in Cambodia. Meanwhile, the expansion of access to financial services for women must be accompanied by policies addressing gender gaps in other economic and social dimensions, so that women are able to reap the potential benefit of using those financial services.
Originality/value
Lack of research focuses on the link between the gender gap in the use of financial services and the gender income gap. The significant gender gap in returns to formal credit usage found in this study demonstrates that the benefits of gender equity in access to and usage of financial services also depend on the effects of other indicators that policymakers must be aware of.
Keywords
Acknowledgements
The author would like to thank the reviewers and the editor for their meaningful comments to improve the manuscript. Gratitude is also extended to H.E. Serey Chea, Director General and Dr. Vouthy Khou, Deputy Director General of Central Banking, National Bank of Cambodia, for their encouragements throughout the course of the author’s research. The views and findings in this article do not reflect the policy or position of the National Bank of Cambodia. All eventual mistakes are entirely my responsibility.
Citation
Sam, V. (2021), "Formal credit usage and gender income gap: the case of farmers in Cambodia", Agricultural Finance Review, Vol. 81 No. 5, pp. 675-701. https://doi.org/10.1108/AFR-05-2020-0062
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited