Journal Article

Financial inclusion, land title and credit: evidence from China

Mi, Yunsheng, Peng, Donghui, Jiang, Meishan, Paudel, Krishna P

2020

Overview

Purpose The purpose of this paper is to study land title’s credit effect from a financial inclusion perspective in China. The focus is both small land holding and poor farmers. Formal and informal finances are considered to test their differences in land title’s credit effect. Design/methodology/approach The authors use augmented inverse-probability weights of the doubly robust method to test the effect of land titling on the rural credit market by addressing self-selection, endogeneity and heterogeneity concerns. Findings Results show that the poor, non-poor and small land holders with land titles are willing to borrow more from formal financial institutions. Land titling increases loan accessibility for non-poor and small land holding farmers. As for informal financing, large land holding and non-poor farmers show a decrease in informal lending. Land titling has a financial inclusion effect for some farmers, but poor farmers’ credit restrictions are not entirely solved by land titling. Originality/value This is the first study that focuses on the financial inclusion effect of farm land titling in China.

• Publisher: Emerald Publishing Limited,Emerald Group Publishing Limited
• Subject: Access / Adverse selection / Agricultural economics / Agricultural land / Agricultural production / Bond markets / Collateral / Consolidation of land holdings / Credit / Default / Developing countries / Farmers / Farms / Financial inclusion / Financial institutions / Heterogeneity / Informal economy / Intangible assets / Interest rates / Land / Land titles / LDCs / Liquidity / Microfinance / Property / Property rights / Restrictions / Selfselection / Third party / Titles / Transfer of title