Abstract
Most government interventions in rural credit markets have been unsuccessful as measured by the targeting of funds to small farmers, repayment rates, and the ability of financial institutions to survive the withdrawal of external funding. This chapter argues that these problems are related to the poor design of incentive systems within lending institutions and to government-imposed interest rate ceilings. It considers how to improve the administrative performance of banks and cooperatives, and the advantages (and shortcomings) of group lending. The apparently large influence of social and cultural factors on the performance of financial institutions suggests the need for experimentation among alternative modes of organization in lending and savings mobilization. -Authors
Original language | English |
---|---|
Title of host publication | The economics of rural organization |
Subtitle of host publication | theory, practice, and policy |
Editors | Karla Ruth Hoff, Avishay Braverman, Josephy E. Stiglitz |
Publisher | Oxford University Press |
Pages | 53-69 |
Number of pages | 17 |
ISBN (Print) | 0195208889 |
State | Published - 1 Jan 1993 |
ASJC Scopus subject areas
- General Environmental Science
- General Earth and Planetary Sciences