Is Agriculture the Highest-Risk Sector? A Determination Using Congolese Data

Abstract

The purpose of this article is to determine the extent of agricultural risk in terms of sectoral risk in the Congo. By applying information asymmetry theory to the banking industry, we postulate that the risk associated with the agricultural sector is not the highest of sectoral risks. The application of the IRISK method produces results that show that, in the Congo, the agricultural sector is indeed not the riskiest of the economic sectors; rather, it is the “wholesale and retail trade, restaurants and hotels” and then “transport, activities of transport auxiliaries and telecommunications” sectors that are the most risky. These results, which are in line with theoretical predictions, imply that it is still possible to consistently finance agriculture provided that Congolese banks change their “negative” perception of this sector.