This study analyzes the effects of credit constraints on technical efficiency of Boro rice growers in the district of Pabna in Bangladesh. Using a simple random sampling technique, the data was collected from 570 Boro rice growers from the Pabna district of Bangladesh. Before conducting a field survey, a theoretical model was designed to identify credit-constrained and non-constrained rice growers. We have analyzed the collected data in two phases: first, we investigated the technical efficiency of Boro rice growers using the stochastic frontier model (SFA); and second, we used an inefficiency effect model to estimate the influence of credit constraints on technical efficiency. Findings indicate that credit-constrained rice growers (CCRG) are 6.7% less technically efficient than credit non-constrained rice growers (CNRG). Findings further indicate that the education level of the household head, family size, certified seed, sowing time, access to extension services, off-farm income, and household savings have significant effects on the technical efficiency of both groups of rice growers. Furthermore, credit size has a significantly positive impact, whereas the interest rate imposed on the principal amount has a significantly negative impact.
Keywords: Bangladesh; Credit constraints; Financial institution; Rice growers; Technical efficiency.
© 2021. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.