Innovations in rural and agriculture finance: Overview
AbstractEverywhere in the world, small agricultural producers are entrepreneurs, traders, investors, and consumers, all rolled into one. In all these roles, small agricultural households constantly seek to use available financial instruments to improve their productivity and secure the best possible consumption and investment choices for their families. But the package of financial services available to small farmers in developing countries is severely limited, especially for those living in remote areas with no access to basic market infrastructure. When poor people have limited saving or borrowing options, their investment plans are stifled and it becomes harder for them to break out of poverty. If households have no access to insurance and are unable to accumulate small savings that enable them to pay for household and business expenses, especially during lean seasons, they are forced to limit their exposure to risk, even if high returns are expected, once again making the pathway out of poverty more arduous than necessary. Inadequate access to financial services is thus part of what is often called the “poverty trap.”
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Bibliographic InfoPaper provided by International Food Policy Research Institute (IFPRI) in its series 2020 vision briefs with number 18(1).
Date of creation: 2010
Date of revision:
agricultural producers; agriculture finance; Developing countries; households; Investment needs; Microfinance; Poverty traps; Rural finance; Small farmers;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2010-07-31 (Agricultural Economics)
- NEP-ALL-2010-07-31 (All new papers)
- NEP-CFN-2010-07-31 (Corporate Finance)
- NEP-MFD-2010-07-31 (Microfinance)
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