Catálogo de publicaciones - libros

Global developments have profoundly affected the lives of rural households in developing countries. They need to be understood in order to discuss the prospects of rural and agricultural finance.

Investments in agriculture, particularly in smallholder agriculture in developing countries, are regarded as critical for meeting the food demands of a growing world population. Improvements in agricultural finance, mainly in providing investment credit to farmers, are widely regarded as an important approach to stimulate production.

The growth of value chains and the associated spread of quality standards has triggered a vigorous debate in the development community over their impacts on poor producers in developing countries. Quality requirements in value chains affect farms through several channels.

African agriculture has, on the whole, been characterized by low yield levels. Yet, as a continent it has significantly untapped potential in terms of productivity and agricultural growth. Infrastructure constraints, the high risk in complex value chains, and a traditional lack of government prioritization of agriculture, have historically provided limited incentive for investment.

Providing sustainable financial services for rural areas and agriculture in developing countries has proven immensely challenging. Billions have been spent to subsidize programs and policies designed to develop financial institutions to serve this neglected market segment. However many of the sector’s decision makers and analysts continue to be dissatisfied with the progress.

One third of AccessBank’s micro-business loans are extended to farmers. The portfolio of this segment has grown quickly and performed well. Why is Access- Bank Azerbaijan successful in agricultural lending, a sector often disliked by other commercial banks? And why is the bank viewing farmers as a strategic core clientele? This case study aims to give some answers and explore some of the myths around agricultural lending.

Banks and other financial institutions have been extremely reluctant to engage in rural finance – and even more so in agricultural finance – for a number of reasons. The remoteness of rural clients coupled with poor rural infrastructure and lack of branch networks imply a high cost of service delivery and, as a result, profitability is assumed to be low.

Three out of every four poor people in developing countries live in rural areas; 2.1 billion of them live on less than two U.S. dollars a day and 880 million on less than one dollar a day. Most of these people depend on agriculture for their livelihoods.

Providing appropriate risk management tools for agriculture is a key challenge for agricultural development. Agricultural insurance systems play a vital role in that process: they provide structured cover against natural perils and legal entitlement for indemnification for the farming sector. As such, they serve as collateral for agricultural loans and provide a safety net for investments.

Serving rural financial markets in developing and transition economies requires understanding the specific needs of the rural population in terms of financial products and services, designing adapted products and services on this basis, and defining an adequate organizational set-up.