Asymmetric Information in Rural Financial Markets and Interlinking of Transactions Through Self-Help Groups

One of the issues contending the rural borrowers, who are composed of small entrepreneurs, fishermen and farmers, is the access to financial services of formal financial institutions. With this fact on hand, this article discusses the issue within the framework of asymmetry of information existing in rural financial markets. It shows that the observed interlinking transactions between banks and various self-help groups provides a mechanism to ensure access to bank credit.financial sector, financial system, credit program, rural sector, borrowing behavior, financial services, credit access

APPLICATION OF ISLAMIC MODES FOR MICROFINANCE IN SUDAN: A CASE STUDY OF RAHAD SCHEME

     Microfinance has become one of the most important mechanisms to fight poverty and economic development in the world. Sudan like other developing countries is depending on microfinance to achieve poverty alleviation and economic development. The Central Bank of Sudan has adopted microfinance programs since it is one of the appropriate mechanisms that help banks to perform their social and economic role. The idea of solidarity groups (SGs) started in Bangladesh as a solution of the warranty problem that cannot secured by small farmers. In Sudan solidarity groups are primarily introduced by the Agricultural Bank of Sudan (Fau branch) to help small farmers in the Rahad agricultural scheme who lack the sufficient guarantee to a quire loans needed to fulfill their agricultural production obligations. The aim of this paper has two folds, first to outline microfinance environment and policies of Sudan under Islamic modes, second synthesize empirical study on the case of Rahad scheme as an example for microfinance with Islamic modes to identify socioeconomic factors affecting farmer's decision to join solidarity groups. The study used secondary data to review the general environment of finance through Islamic forms in Sudan, for the case under study, a primary data were collected using structured questionnaire, a sample of 120 farmers (60 farmers joined solidarity group and 60 of self-financed farmers) were selected randomly from the scheme. A binary logistic regression model (Logit) was used to estimate the correlation between the dependent variable of joining of the solidarity groups, and independents variables namely, educational level, farm location, machinery possession, marital status, land ownership, animal's ownership, risk exposure and financial ability. A paired samples (T) test used to examine and estimate the difference between two paired samples means of costs and returns. The reviewed policies of Islamic microfinance modes in Sudan showed a positive environment for credit including devoting 12 percent of the total investment portfolio of each bank to microfinance credit, in addition to introducing guarantee services via the insurance companies, and suitable repayment period with low interest. The empirical results of the Logit regression showed that four variables were statistically significant in affecting the farmers’ decision of joining SGs namely are educational level, machinery ownership, financial ability and the type of land tenure. While the factors of farm location, risk exposure, and animal ownership are not significant. The paired samples (T) test used to examine and estimate the difference between two paired samples means (solidarity group and self-financed), the results showed that there are no significant differences between the means of cost and returns for the two groups, which indicate that the bank finance has no financial burden on the SGs farmers. The study recommends generalization of the solidarity group's finance in the irrigated sector of the Sudan

Credit Reserve and the Demand for Agricultural Loans in Cross River State, Nigeria

This paper analyses credit reserve amongst small scale crop farmers and its use in the demand for loans from banks in Cross river State, Nigeria. 101 crop farmers from the three agricultural zones of Cross River State were randomly sampled. The results showed that the mean credit reserve of these farmers was N435, 332.89 (USD 2720.83). Age, level of education farm size and the amount of credit reserve owned were positively related to the demand for agricultural loans. Keywords: Credit reserve, small-scale farmers, loans, Cross River State, Nigeria

Is There Supply Distortion In The Green Box? An Acreage Response Approach

The shift of the farm subsidies toward programs classified as being decoupled income supports in the WTO’s URAA raises the question of their true impact on production and trade. In this study, we measured the acreage effects of the Canadian whole farm programs under uncertainty. Based on the theoretical discussions regarding the role of the insurance effect in acreage decisions, we extend the theoretical restrictions examined by Chavas and Holt (1990)which enables us to include this effect in our model specification. Hence, we modified the expected utility maximization framework (under the hypothesis that farmers are risk averse) developed by Chavas and Holt (1990) and derived three distinct effects: market effects, the wealth effect, and the insurance effect.WTO, decoupled, green box, area, production, Agricultural and Food Policy, Crop Production/Industries, International Relations/Trade, Production Economics,

Guarantee schemes : an alternative to the supervised credit program

Paper presented during the ACPC-PIDS-OSU sponsored Seminarworkbhop on "Financial Intermediation in the Rural Sector: Research Rebultb and Policy Ibbueb" held on 26-27 September 1988 at the Cuaderno Hall, Central Bank of the Philippines. This ib part of a larger Study on comparative bank analysis jointly conducted by the Agricultural Credit Policy Council (ACPC), Philippine Institute for Development Studied (PIDS) and Ohio State University (OSU). The project wab coordinated by Dr. Mario B. Lamberte (PIDS) and Dr. V. Bruce J. Tolentino (ACPC)

POLICIES FOR AGRICULTURE IN POLAND AND THE NETHERLANDS; CONTRIBUTIONS TO A POLICY DIALOGUE

This volume contains background papers that contributed to discussions between Polish and Dutch agricultural policy makers, held in Warsaw (16-17 July, 2002) and in The Hague (26-27 September, 2002). These meetings took place in the context of the Utrecht Conference in which bilateral meetings on various policy issues are organised. The papers give insights in the agricultural and rural development in both countries and point at the main problems at stake. Further, the contributions discuss the past and present agricultural and rural policies and show to what extent these policies help(ed) to tackle the major problems of the agricultural sector and rural areas. Discussions took place on various issues such as farm retirement and direct payment schemes, competitiveness of the sector and the future developments of the Common Agricultural Policy in an enlarged European Union.Agricultural and Food Policy,