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Access Constraints of Romanian Peasants in Relation to the Formal Financial Sector

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  • G. Schrieder
  • F. Heidhues

Abstract

This paper analyses the financial deepening position of both Romania’s financial market in general and the rural financial market in particular. The indicator M2/GDP (20% in 1995) shows that Romania’s financial depth is far less than might be expected for a country with its level of GNP. Therefore, stability enforcing macro- economic, legal and monetary policies are necessary to create the enabling environment for effective and efficient financial intermediation which is crucial in the overall Romanian economic transformation process. However, Romanian rural bank intermediaries either do not wish to extend their services to small scale agriculture and rural enterprises or they do not have the scope in terms of variety, quality and efficiency of instruments/services to deal with this type of clientele. While the Romanian rural financial market is relatively "deep" with regard to the number of intermediaries, it is by no means so with regard to its monetarization and service array. Therefore, the paper goes on to propose possible financial innovations that intermediaries engaging in rural finance may seek to adopt in order to become capable of efficiently supplying their services to small scale rural enterprises.

Suggested Citation

  • G. Schrieder & F. Heidhues, 1997. "Access Constraints of Romanian Peasants in Relation to the Formal Financial Sector," CERT Discussion Papers 9712, Centre for Economic Reform and Transformation, Heriot Watt University.
    • Handle: RePEc:hwe:certdp:9712
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    References listed on IDEAS

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    1. Besley, Timothy & Coate, Stephen & Loury, Glenn, 1993. "The Economics of Rotating Savings and Credit Associations," American Economic Review, American Economic Association, vol. 83(4), pages 792-810, September.
    2. J.R. Davis & P.G. Hare, 1997. "Reforming the Systems of Rural Finance Provision in Romania: Some Options for Privatisation and Change," CERT Discussion Papers 9713, Centre for Economic Reform and Transformation, Heriot Watt University.
    3. Holt, S.L. & Ribe, H., 1991. "Developing financial institutions for the poor and reducing barriers to access for woman," World Bank - Discussion Papers 117, World Bank.
    4. Zeller, Manfred & Schrieder, Gertrud & von Braun, Joachim & Heidhues, Franz, 1997. "Rural finance for food security for the poor," Food policy reviews 4, International Food Policy Research Institute (IFPRI).
    5. Hoff, Karla & Stiglitz, Joseph E, 1990. "Imperfect Information and Rural Credit Markets--Puzzles and Policy Perspectives," The World Bank Economic Review, World Bank, vol. 4(3), pages 235-250, September.
    6. Zeller, Manfred & Ahmed, Akhter U. & Babu, Suresh Chandra & Broca, Sumiter S. & Diagne, Aliou & Sharma, Manohar, 1996. "Rural finance policies for food security of the poor," FCND discussion papers 11, International Food Policy Research Institute (IFPRI).
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    Cited by:

    1. Heidhues, Franz & Davis, Junior R & Schrieder, Gertrud, 1998. "Agricultural Transformation and Implications for Designing Rural Financial Policies in Romania," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 25(3), pages 351-372.
    2. J.R. Davis & P.G. Hare, 1997. "Reforming the Systems of Rural Finance Provision in Romania: Some Options for Privatisation and Change," CERT Discussion Papers 9713, Centre for Economic Reform and Transformation, Heriot Watt University.
    3. Gertrud Schrieder & Franz Heidhues, 1998. "Transformation and Rural Finance," CERT Discussion Papers 9812, Centre for Economic Reform and Transformation, Heriot Watt University.
    4. Junior R Davis & Angela Gaburici, 1998. "The Economic Activity of Private Farms in Romania during Transition. Just how competitive are they?," CERT Discussion Papers 9807, Centre for Economic Reform and Transformation, Heriot Watt University.

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