Rural Finance Services as a Development Factor
Creators:González Vega, Claudio
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Publisher:Ohio State University. Department of Agricultural, Environmental, and Development Economics
Series/Report no.:Ohio State University. Department of Agricultural Economics and Rural Sociology. ESO (Economics and Sociology Occasional Paper). No. 1636
This paper examines the role of financial services in rural development. It first discusses four reasons for the recent interest in financial markets: inflation, foreign debt, urban bias, and the deficiencies of traditional agricultural credit programs. The conceptual framework for the design of these programs is then evaluated. Lack of institutional viability, borrower domination, mistrust of the market, and savings pessimism are examined in this connection. The contributions of finance to development are explored in terms of access, transfers of purchasing power, quality of services, and transaction costs. The elements of Ohio State's new vision are highlighted, and the promotion of rural financial markets examined in terms of environment, policies, institutions, and technologies.