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Policy and strategies

Policies are powerful tools. They are basic to governance and administration. They exist at several levels: national government, local governments, and within firms and institutions. They are so basic that they are often overlooked in the search for better ways of pursuing objectives. This applies in many spheres of human activity. It applies especially to the provision of banking services for low-income people in rural areas. Why is this?

There may be several reasons, and many of these are specific to a given country, district or institution. But a common thread is that the policies which affect agricultural and rural finance belong to several different policy-making zones. Three in particular have an impact, namely: agricultural sector policy, financial sector policy and macroeconomic policy. Since many different groups are involved there is the danger that the special needs for rural and agricultural banking could be overlooked, or, as is more likely, that policies will be developed which are partially in conflict with one another, rather than being mutually supportive.

The FAO Agribusiness and Finance Group can assist member countries by:

  • advising on the general policy and regulatory framework affecting rural and agricultural finance, and particularly on financial sector policies and legislation; and
  • advising on restructuring rural financial systems to include various types of institutions and ways of establishing more effective operational linkages between savings and credit and between informal and formal financial intermediaries.
  • advising on approaches and mechanisms for increasing investment into the agricultural and agribusiness sector.
World Summit on Food Security, Rome, FAO 2009

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