Rural Finance: Issues, Design and Best Practices
This book is intended to serve as a reference for decision-makers as they seek to create an environment conducive to the development of rural financial markets. It gives an excellent overview of the traditional approach to rural finance, which relied heavily on supply-led, state-owned agricultural credit institutions, and highlights how widespread, urban-biased policies have impeded rural development.
The book then illustrates the emerging new approach which focuses on creating a favourable policy environment in terms of the macro-economy, agricultural and financial sectors, rural development and the legal and regulatory framework. The book is illustrated throughout with examples and concludes with case studies of three successful rural finance institutions – the Grameen Bank of Bangladesh, the Bank of Agriculture and Agricultural Cooperatives (BAAC) in Thailand, and the Bank Rakyat of Indonesia, Unit Desa (BRI-UD). Two primary criteria are identified as the basis for assessing the performance of rural financial institutions – outreach and self-sustainability.