Finance for the Small Commercial Farmer

Abstract

Loans to small commercial farmers increase their investment and significantly accelerate the agricultural growth rate. Increased lending to those farmers requires a specialized lending agency such as that in all high-income countries and the bulk of Asian countries. Competition in lending is desirable so a plethora of other lending institutions is desirable but the core is the specialized agency. This chapter starts with background information and then provides brief points on the wide range of rural lending institutions. That is followed by detailed analysis of the requirements for a specialized agricultural lending institution. The chapter closes with a discussion of literature that presents saving, insurance, and borrowing as being interchangeable.