Source(s) of financing ADF: 653946.69 Cofinanced: 740000 Government: 40000
Implementing Agency: MINISTRY OF AGRICULTURE - WATER DEVELOPMENT
Location: Entire Country
The study aims at providing a response as to what the problems, constraints and prospect for rural credit are, and propose various alternatives to address the issue of rural credit.
The study which will last for a maximum of eight months will analyse the agriculture and related sectors, examine the role of the various participants especially women, analyse the problems and prospects facing these participants and the sector and subsectors, examine the various agriculture and credit institutions and related aspects of the sector such as production, marketing, input delevery systems, price etc. It will dwell lengthily and in detail on credit, constraint to credit for all participants, refund mechanism and modalities, credit terms and conditions. It will look into credit institutions past and present, for the rural sector and do a detailed analysis of problems and prospects of the institutions. It will present several alternative to address rural credit issues and define in detail actions to be undertaken to ensure that the rural world has afforable timely and adequate amounts of credit. The selected mechanism will be analysed in detail.
The study will ensure that a credit mechanism is available to meet the needs of the rural world for credit for increased production, marketing etc.
Given the above urgent need, it is important that a mechanism be created or strengthened to cater for these needs. Previous attempt at establishing a specialised credit institution for the agricultural sector was not very successful. The bank created Lima Bank, had serious managerial and operational problems. Further the sector response under the restrictive agricultural and economic management system was not as expected. It is necessary therefore to do a diagnostic study of the credit subsector for agriculture before proposing a mechanism to address the shortage of loanable funds for the rural world.