Household-Level Credit Constraints in Urban Ethiopia

Course ID
Ethiopian Economics Association (EEA)
Abbi M. Kedir


There is a dearth of empirical evidence on the determinants of household credit constraints in Sub-Saharan Africa. Most studies have disproportionally focused either on household credit constraints in rural areas or credit constraints facing firms. There are also a number analytical problems linked with identifying credit constrained households. Using the Fourth Round Ethiopian Urban Household Survey conducted in 2000 which provides a unique set of variables in relation to access to credit, we extended the approach of Jappelli (1990) to identify credit constrained households directly. We find a high percentage of credit-constrained households. After controlling for potential endogeneity and selectivity bias, our econometric models showed that current household resources, number of dependants and location are significant correlates of credit constraints. Further, we discuss the policy implications of our findings

Corporate Author:Ethiopian Economic Association (EEA)
Publisher:Ethiopian Economic Association (EEA)
Primary Descriptors:credit constrained households; credit policy

Secondary Descriptor:instrumental variables; selectivity bias

Geographic Descriptors:urban Ethiopia; Africa
Cataloge Date:03/02/2013
Broad Subject heading:endogenously
Call Number:330.05 ETH JOU
Serial Key Title:Ethiopian Journal of Economics
Publication catagory:Ethiopian Journal of Economics
Content type:EEA Publication
Year:April, 2011
Publication date:2013-03-02 00:00:00
Forum or Discussion date:2013-03-02 00:00:00
PDF file: Abbi and Ibrahim_Household-Level Credit Constraints In Urban Ethiopia.pdf
Place of publication: Addis Ababa, Ethiopia
Type of material:Serial (Journal)
Current frequency:Semiannual
Author: Abbi M. Kedir, And Gamal Ibrahim

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