 |
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 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 Rural Finance Group can assist member countries by:
- advising on the general policy and regulatory framework affecting rural 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.
|
|
|
PUBLICATIONS |
|
|
Agricultural Finance: Getting The Policies Right
E. Coffey FAO/GTZ AFR Series No.2 1998 |
(E) |
(F) |
(S) |
|
This publication sets out to clarify the process of policy formulation for agricultural and rural finance, and emphasises the mechanisms involved. It is addressed to those responsible for formulating, managing and tending the rural financial system, namely, policy makers, donors and managers of rural financial institutions, financial experts/consultants and project designers. It highlights some of the key issues that should be addressed in the policy making process and provides a diagnostic methodology which can be used as an aid in the evaluation of the comprehensiveness of a given policy-making system at national level. Case study examples are presented throughout the document to highlight the importance of some key issues when formulating an agricultural finance policy. |
|
|
|
Prudential Regulation and Supervision for
Agricultural Finance
M. Fiebig FAO/GTZ AFR Series No.5 2001 |
(E) |
(F) |
(S) |
|
Generally, financial institutions are not allowed to offer deposit services unless they are regulated and supervised by a supervisory body. For any small depositors, the safety of their deposits is a priority. In rural areas agricultural lending brings specific risks to rural financial institutions and they need to be closely watched by any regulatory body. Small rural depositors cannot monitor the management of financial institutions where they deposit their funds themselves. This publication deals with experiences in the field of regulation and recommends specific regulatory and supervisory measures appropriate to agricultural finance. |
|
|
|
Safeguarding deposits: learning from experience
ASB No.116 1995 Reprinted 1997 |
(E) |
 (F) |
(S) |
|
From a public policy perspective, a goal to ensure the stability of the financial system should be of paramount performance. The failure of any bank, no matter how small, may lead to loss of confidence in the system, unless the government is able to handle the crisis in an orderly and systematic fashion. From the point of view of savers, the stability of financial markets is equally important as people cannot afford to lose their savings. The aim of this book is to present information on the causes and consequences of financial instability and on measures to rehabilitate ailing banks and financial service cooperatives, based on experience in different countries. It also gives details of preventative measures which help to safeguard deposits. |
|
|
|
Interest rates and rural credit: subsidise or liberalise?
J-L. Pizzaro 1994 |
|
(F) |
|
|
This document (in French only) aims at giving a panoramic vision of the main characteristics of the financial liberalization process, its possible consequences for rural financial intermediation, and the conditions that could contribute to improved financial deepening in rural areas. It describes the context and justification of the financial liberalization policy in contrast with that of interest subsidies and, in doing so, focuses on their respective effects, beneficial and detrimental, on rural financial markets and their clients. It also analyses the framework for the implementation of a financial liberalization policy in the field of rural finance and discusses the reasons why subsidized agricultural credit projects or programmes still continue. Finally, it makes an attempt to systematize rural development projects having a financial component, in relation to the degree of the financial development of the region or country where they operate. |
|
|
|
How development projects can promote
sustainable and viable financial services
1995 |
(E) |
(F) |
|
|
This report documents experiences from projects executed by FAO in Fouta Djallon in Guinea between 1990 and 1993. It emphasises that direct credit operations managed by projects should be an exception and not the rule and that every effort must be made to provide support to institutions who can provide lasting financial services. The report also brings out the importance of providing farmer training in addition to credit and, if a project is involved in credit activities, of following strict banking principles. |
|
| |
| |
