Access to Finance: Determinants and Limitations to the Demand Side of Finance for Liberia’s Rural Market

Abstract

This study reviews the theoretical literature regarding determinants and the limitations to the demand side of rural finance in Liberia with the coming into effect of the National Financial Inclusion Strategy (NFIS). The outcome of this study reveals that education, income level, household assets, and agriculture rank as the outstanding drivers of the demand for finance in Liberia’s rural market. Obviously, the demand for financial services in the rural market of Liberia is very high. However, the demand is limited by a litany of factors such as slow economic growth & lack of job opportunities, poor public infrastructure, structural unemployment, few diversification opportunities, seasonality in agriculture, imperfect information & supervision, and poor social protection and market failures. The keywords used by the author in this article encompass creditworthiness, information asymmetry, financial inclusion, Pareto efficiency, poverty alleviation, and rural finance. Keywords: Credit worthiness, Financial inclusion, Information asymmetry, Pareto efficiency, Poverty alleviation, Rural finance.