Microcredit as an adaptation strategy to climate change in coastal Bangladesh based on the theory of planned behavior

Climate change threatens the existence of food security in Bangladesh’s coastal areas, especially because financial adaptation programs such as micro-credit are necessary to endure in the long run. The present study aims to use the theory of planned behavior (TPB) to assess the determinants of intentions of smallholder farmers to use micro-credit to adapt to climate change, as opposed to consumption. The design is specifically to determine the predictive validity and hierarchical effect of attitude, subjective norms (SN), and perceived behavioral control (PBC) in a high-risk area. A cross-sectional survey was done on 385 smallholder farmers in the climate-prone coastal areas of Bhola and Barisal. Partial least squares structural equation modeling (PLS-SEM) was used to analyze data in an attempt to test the structural relationships between TPB constructs and adaptation intention (AI). PLS-SEM analysis demonstrated that there was a unique sequence of motivations typical of the necessity-driven adaptation. Attitude proved to be the most influential source of intention (T = 6.593), another factor was subjective norms (T = 5.302), and perceived behavioral control (T = 2.848) had the least, but again a significant impact. These findings show that the personal convictions of the farmer in the effectiveness of the strategy and social acceptance are much stronger than the issues of accessibility and structural obstacles in high-risk climate zones. To gain faster adoption, microfinance institutions (MFIs) must go beyond accessibility. The policies must package micro-credit with crop insurance to increase the sense of perceived control and deploy local climate adaptation champions to capitalize on social norms. The paper is one of the first works to empirically show a change in the hierarchy of motivation to climate finance. It adds to the literature of TPBs as it demonstrates that environmental vulnerability increases the contribution of attitude and social norms compared to PBC, providing a new behavioral paradigm to the Global South.