Dale W Adams Undermining Rural Development With Cheap Credit

Annotation

Originally published in 1985, twenty-three chapters are brought together in 4 parts dealing with, respectively, problems in rurala finance, interest rate policies,a politicsa and finance, and new directions for rural financiala markets. In an introduction it is argued that cheap and abundant credit is often regarded as essential fora rural developmenta but that actions taken on the basis of this assumption have given disappointing results. Low-interest policies and the improper use of financial markets are seen as the principal reasons for this. It is recommended that higher and more flexible interest rates are allowed and that little or no attention is given to target loans. Informal lenders are thought to offer valuable services therefore they should not be discouraged. More emphasis should be put on voluntary savings mobilization and access to formal loans by non-farm rural firms. It is concluded that many traditionala agricultural credita programmes are counterproductive and that attractive product and inputa pricesa together with highera yieldsa would be more powerful in stimulatinga agricultural development.