Determinants of Household Demand for Credit Use in Myanmar

Abstract

This study was designed to identify households’ socio-­‐economic factors influencing the demand for credit use in Myanmar. To avoid the censoring bias that Ordinary Least Squares (OLS) could generate, a Tobit Model was adopted on a total sample size of 431 respondents from 6 different townships. The empirical results show that gender of household head, educational level, occupation, land holding size, marital status and per capita expenditure are important factors and significantly influencing on the demand for credit use. However, non-­‐ significant of the location dummies in the result show that the demand for credit by the households across the areas sampled is not different from each other or follow similar pattern. Based on the results, farming, as occupation is a major driver of demand for credit highlights the need for farmers to have access to timely credit in food production in study. Moreover, female headed households demand for more credit than male underscores policy relevance of improving female access to credit to meet timely demand and the finding also stress the role of human capital (education) in demand for credit.