A Critique of Loan Targeting and What to Do After Overcoming the Habit
Creators:Adams, Dale W.
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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. 2087
Studies in Rural Finance
Loan targeting has been a popular development tool, especially in centrally planned countries, for addressing poverty and to speed development. The results of these efforts, however, have often been disappointing. Three weaknesses of loan targeting are discussed and suggestions are also given on how financial markets might be better used after reforms have subjected most economic decisions in rural areas to market forces.