How does access to financial credit and markets, as well as proximity to forests, influence households’ livelihood strategies in the developing world? Several studies have noted the positive effects of market access, access to financial credit, and forest proximity on income, off-farm employment, and alleviation of poverty. However, scholars have studied as if these factors were independent from each other, which is unlikely in reality. For example, forests tend far away from markets, which are associated with access to financial credits. In turn, access to financial credit can improve forest use technology. Indeed, examining the interrelated impacts of access to markets, financial credit, and forests has important implications for policy and development practice, such as poverty reduction, infrastructure development, financial credit provision, natural resource conservation, and promotion of household and community resilience—especially for highly forest-dependent rural populations in the developing world.
John Felkner, Ph.D., and his co-authors examine the interrelated dynamics of market access, financial credit use and formal credit density, and forest access on livelihood income size and composition in Cambodia. The authors conducted a survey of 2,417 households in 64 villages in four provinces in Cambodia in 2005 and 2006. These provinces present a high diversity of economic activities and socio-economic conditions, as well as variation in accessibility to both forests and urban markets. The survey collected information on household demographics (including income), proximity to forests, market access, and financial credit use and access. The authors then use descriptive and statistical analysis to examine the relationship between these factors. Moreover, further statistical techniques examine which of the main effects (financial use/credit, market access, or forest access) has the greatest impact on livelihoods.
The analyses show that financial credit use and market access are generally associated with increased income in several categories (except crop income). The authors also find that travel time to large cities is associated with increased off-farm income, but on-farm and crop incomes where market distance is larger. Also, access to forests contributes to income benefits.
