Financial Resources in Rural Development – An Analysis of Relational Capital in Credit Cooperatives

Abstract

Rural areas have chronic difficulties in accessing financial resources. Besides their structural weaknesses, these areas have to add the financial constraints that threaten rural development. In many parts of the world, numerous official reports show lack of rural access to formal financial services, the main reasons being excessively conservative bankers and lack of interest in rural credit (for example, loans to poor farmers). In addition, the harsh conditions of informal lenders (in particular, high interest rates) become a form of usury.