Rural Finance for the Private Farm Sector in Romania: Obstacles and Opportunities
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Publisher:Ohio State University. Department of Agricultural, Environmental, and Development Economics
Series/Report no.:Ohio State University. Department of Agricultural, Environmental, and Development Economics. ESO (Economics and Sociology Occasional Paper). No. 2514
This paper describes the manner in which the rural financial market and the private farm sector operate and interact. The state of the financial market, current lending conditions, and obstacles to credit flows on the supply and demand sides of the market are reviewed. We argue that there exists a preponderance of evidence which supports the notion that the limited number of observed credit transactions in the formal sector may be explained by restrictive factors on the demand side of the market. Thus, we challenge the conventional wisdom that Romanian farmers are credit rationed by lenders, and suggest that the limited frequency of credit transactions may be the result of economically rational decision making on the part of the farm households.
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