When it comes to encouraging production and raising incomes of small farmers, governments in developing countries do not lack political advice. Among them, the provision of cheap credit has often been encouraged as a means of stimulating production.
The examination of existing rural money markets and institutions and the contribution of research to policy issues in supplying credit to small farmers is the main subject of this book.
In particular, the author deals with three categories:
- firstly, national credit policy and the effect of macro-policy upon the performance of rural financial markets and institutions.
- secondly, how financial intermediaries such as government agencies, private banks, informal money landers, traders and farmers' organisations operate.
- finally, the last category discusses the rural household and the role and impact of credit within the small farm enterprise.
This book discusses the results of the widespread cheap agricultural credit policies in developing countries and concludes that they are not ecouraging.