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Transaction Cost and the Viability of Rural Financial Intermediaries


  • Untalan, Teodoro S.
  • Cuevas, Carlos E.


Recognition of a continuous improvement in the formal financial system is necessary for economic growth. Over the years, the government has been infusing cheap funds into the rural sector. Unfortunately, it overlooks a number of serious issues regarding bank’s transaction costs. This article develops a method of estimating transaction costs for each bank activity. It also explains the differences and the composition of transaction costs among commercial banks, rural banks and private development banks.

Suggested Citation

  • Untalan, Teodoro S. & Cuevas, Carlos E., 1989. "Transaction Cost and the Viability of Rural Financial Intermediaries," Philippine Journal of Development JPD 1989 Vol. XVI No.1-b, Philippine Institute for Development Studies.
  • Handle: RePEc:phd:pjdevt:jpd_1989_vol__xvi_no_1-b

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    References listed on IDEAS

    1. Lamberte, Mario B., 1987. "Comparative Bank Study: A Background Paper," Working Papers WP 1987-04, Philippine Institute for Development Studies.
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    Cited by:

    1. Aldaba, Fernando T., 2002. "Philippine Development: A Research Journey Through the Philippine Journal of Development," Philippine Journal of Development PJD 2002 Vol. XXIX No. 2-, Philippine Institute for Development Studies.
    2. Meenakshi Rajeev & B.P. Vani & Veerashekharappa, 2017. "Self-help groups for India’s financial inclusion: Do effective costs of borrowing limit their operation?," ICDD Working Papers 19, University of Kassel, Fachbereich Gesellschaftswissenschaften (Social Sciences), Internatioanl Center for Development and Decent Work (ICDD).
    3. S. Safdar Hosseini & Mohammed Khaledi & Richard Gray, 2009. "An analysis of transaction costs of Islamic banks in rural Iran," Agribusiness, John Wiley & Sons, Ltd., vol. 25(3), pages 291-313.

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