A Critique of Traditional Agricultural Credit Projects and Policies

摘要

Despite good intentions, a majority of developing countries' rural financial market (RFM) projects have generally contributed to overall resource misallocation, inequitable wealth distribution, and political sabotage. This paper reviews common problems and erroneous assumptions associated with RFM projects, outlines new policy approaches and suggestions for making improvements, and offers explanations as to why new ideas may not be accepted by local policymakers. Many of the problems cited, such as loan repayment delinquencies, medium- and long-term formal credit unavailability, high loan transaction costs, and credit flow distortions, are due mainly to inaccurate assumptions about how RFM's operate and about the factors which determine borrower and lender behavior.