Still on the IHS dataset, we take on this week’s post analyzing credit receive (access to loan). Loan in this case includes both those given in cash and in kind. Several questions relating to the loan were asked, however, we will concentrate on those which pertain to the main reason for taking loan and the amount of credit that was received. We will start off by analyzing the main reasons for taking loan, followed by a distribution of average loan received by LGA. We will then pay key attention to North Bank (Kerewan LGA) analyzing the reasons for taking a loan by gender and finally explore the distribution of credit received by districts in North Bank.
Figure 1 provides to us a breakdown of the main purposes for taking loan. It indicated that little below 50% of the respondents take credits for consumption purposes. This is followed by Housing, Business Expansion and Agricultural land and equipment as reported by 10-12% of respondents. Less than 5% of the respondents reported that the main reason for taking loan were for the purchase of vehicle, travel and health expense which form the bottom three.
Figure 1: Reasons for Taking loan (% of Respondents)
This is partly explained by the important role that food and shelter play as part of the basic needs in life. Also, given that the survey was largely concentrated in the rural area where there is a behavior of taking credit mostly in the form of food item because due to its dependent as the main source of income. Thus, whenever there is a bad harvest taking credits in kind is mostly the best available option. From the figure it is also evident that nearly 100% of the respondents do not take loan for vehicle or travelling purpose. This further goes to indicate that vehicles and travels are things that most individuals can live without. You might wonder why health is part of the bottom three, however, this can be explained by the fact that health services in public hospitals is relatively less expensive. Even for those that receive health services from private hospitals we assume that these expenditures are budgeted for either as an insurance coverage or savings.
Using Table 1, we look at the mean loan received across LGA. It indicates that on average households in Kanifing (D22,402), Banjul (D21,152) and Brikama (D12,111) relatively receive more loan whilst those in Janjanbureh and Kuntaur receive the least of D6,110 and D4,710 respectively. This follows common belief that those in purely urban areas have more access to credit as compared to the rural areas. This is due to the availability of commercial banks and other micro-finance institutions. Comparing, the common access from “kompins” we can confidently say that the amount of loan you can receive is relatively more in “kompins” found in urban as compared rural areas.
Table 1: Average Loan Received by LGA
|LGA||Loan Amount (in Dalasi)|
Let us now shift our attention into analyzing North Bank (Kerewan LGA), Figure 2 represents the gender differences that arise from purpose of loan. From the figure we can see that except for using loans for the consumption of goods there is no major difference in terms of other reasons for taking a loan at gender level. For loans taken purposely for consumption of goods, it confirms that more males (about 35%) use credit to consume goods as compared females (17%). This follows conventional knowledge that men bear the key responsibility of providing (fish money and other necessities) for the family thus this pushes them to go the extra mile to take up loans when the need and opportunity arise in other to take care of the family.
Figure 2: Loan Amount by Districts in North Bank (Kerewan LGA)
Let us now look at the main reason for taking loans across the districts in North Bank. Figure 3 confirms to us that the median household in Illiasa (D5,000) received more loan, this is followed by household in Lower and Upper Niumi with D4,000. Whilst the median households in Lower Badibu, Jokadu and Sabach Sanjar obtained about D2,500, households in Central Badibu (D2,000) received the least loan amount. Whilst variation in the amount of loan received is highest in Lower Nuimi it is least in Sabach Sanjar with the 75th percentile of households receiving approximately D12,500 and D5,000 respectively. This implies that, from the North Bank region, households found in the district of Lower Nuimi (Barra, Essau, Amdallai, Fass etc) obtain relatively more loan, this can be explained by its proximity institution that provide loans thus making loans relatively accessible.
Figure 3: Loan Amount by Districts in North Bank (Kerewan LGA)