FAO of the UN : Rural Finance

	Subjects
	Rural Finance

	Policy Advice
	Agricultural Finance Revisited
	Financial Institutions
	Agribank-Stat
	MicroBanking System
	Project Guidance
	Capacity Building
	Regional Agricultural Credit Associations
	Research in Progress
	Rural Finance Learning Centre

FINANCIAL INSTITUTIONS

As part of its remit to assist FAO members to build viable financial intermediation in rural areas, the Rural Finance Group provides advice on designing and implementing systems and operational procedures which improve the efficiency and effectiveness of financial institutions.

Studies have been made on why many agricultural development banks have failed and what steps can be taken to restructure them and improve their viability. It is the policy of the Group to encourage a diversity of financial service providers, so equal attention is given to informal intermediaries and their linkages with formal institutions.

Guidance has been prepared on better practices for agricultural lending and overcoming collateral constraints. The issue of incorporating accountability for the environment into bank lending policies has also been addressed.

The FAO/GTZ MicroBanking System

Since 1988 the FAO Rural Finance Group has been involved in the development of some low cost software designed to automate banking operations using basic PC equipment. Known as the FAO MicroBanking System, it was promoted not simply as a computerisation exercise but as a manpower development programme for improving the efficiency of banking operations and thereby lowering costs. For more information please go to the MicroBanking System page.

Agricultural Finance Revisited

Some of the reports generated by this initiative are particularly useful for financial institutions who need to improve or expand their agricultural lending activities. Please go to the Agricultural Finance Revisited page for details.

Agricultural Service Bulletins

Many of the Agricultural Service Bulletins described in the section on Policy Advice may also be of interest to senior management staff in financial institutions.

Other Bulletins which are aimed more directly at financial service providers are:

Contract farming: partnerships for growth

C. Eaton and
A. Shepherd

2001

ASB Series No. 145

Contract farming has been in existence for many years as a means of organizing the commercial agricultural production of both large-scale and small-scale farmers. Interest in it continues to expand, particularly in countries that previously followed a central planning policy and in those countries that have liberalized marketing through the closing down of marketing boards. This guide describes in detail the general modus operandi, internal functions and monitoring mechanisms of contract farming. It aims is to provide advice to managers of existing contract farming companies on how to improve their operations, to companies that are considering starting such ventures on the preconditions and management actions necessary for success and also to government officials seeking to promote new contract farming operations or monitor existing operations.

Banking for the environment

W.M. Gudger and
D.C. Barker

1993

ASB Series No.103

This publication is aimed at bankers and particularly those responsible for rural investment lending. Through their decisions, financial institutions can have quite an impact on natural resource management. This book explores the sources of environmental degradation, in particular forest clearance and agricultural intensification. A method of environmental cost benefit analysis for agricultural lending is explored, together with banking economics and environmental accounting. The book concludes with a model for sustainable agricultural lending through institutionalising an environmental review process.

To order or download any Rural Finance bulletins or reports please go to our publications page.

Other Publications

Collateral in Rural Loans

1996

FAO / ALIDE

This report was prepared by the Rural Finance Group in collaboration with ALIDE, following studies of the role and importance of collateral in agricultural and rural loans in ten Latin American countries. It was noted that collateral is vital for the growth of formal credit markets, particularly for smallholder farmers. Different types of conventional collateral, e.g., third party guarantee, mortgage, pledged assets, guarantee funds, are examined in terms of their legal and economic characteristics. The scope for non-conventional collateral is also explored, e.g., solidarity groups, blocked savings, endorsement, loan graduation, interlinked transactions. The report is aimed at the staff of development finance institutions.

Crop Insurance Compendium

1991

FAO

The aim of the compendium is to provide organisations with quick and easy access to details of existing crop insurance programmes. It is organised in 4 parts:

A world summary of crop insurance availability and analysis of schemes by various criteria, e.g. insured perils, sum insured, reinsurance, loss assessment, insured crop, compulsory or voluntary nature.
Regional reports and statistics on crop insurance schemes.
Country reports providing details of crop insurance structures and schemes in 72 countries.
Contact details and addresses of companies included in the compendium.

Training Materials

The Rural Finance Group has been involved in the production of two videos on the subject of savings, which are intended to be used by financial service providers. Details can be found in the section on Capacity Building.

Publications from Other Services

Some publications produced by other Services within FAO have relevance to rural finance, e.g.

A guide to gender sensitive microfinance	More info..
Mobilizing capital in agricultural service cooperatives	Download