SME development as an aspect of rural development

The rural population of Central Asia depends on agriculture for a significant proportion of household income. Yet production and productivity levels in the farm sector have fallen, and agriculture cannot continue to absorb excess labour without rural income levels falling still further. Small and medium enterprises have a key role to play in promoting equitable economic growth and reducing poverty in the rural areas of Central Asia. The small and medium enterprise (SME) sector is relatively dynamic, interacts favourably with the farm sector, and has the potential to absorb excess labour in the farm sector, and to provide rural households with key additional sources of income. This paper assesses the significance of SMEs in the rural economy, and then builds on that assessment to analyse the policy and regulatory environment for rural SMEs. Policy responses to the particular challenges offered for SME development by rural areas are outlined. Practical recommendations for effective rural SME promotion by central and local government and governmental agencies are presented, with relevant examples and case studies where appropriate to provide a real world context

The Reaction of Stock Prices to Unanticipated Changes in Money

This paper investigates the short-run effect of unexpected changes in the weekly money stock on common stock prices. Survey data on money market participants' forecasts of money changes are employed to construct the measure of unanticipated movements in the money stock. The results indicate that an unexpected increase in money depresses stock prices and, consistent with the efficient markets hypothesis, only the unexpected part of the weekly money announcement causes stock price fluctuations. The October 1979 change in Federal Reserve operating procedures appears to have made stock prices somewhat more sensitive to large money surprises.

Firm Characteristics, Unanticipated Inflation, and Stock Returns

This paper re-examines the effects of nominal contracts on the relationship between unanticipated inflation and individual stock's rate of return. This study differs in three main ways from previous research. First, announced inflation data are used to examine the effects of unanticipated inflation. Second, a different specification is used to obtain more efficient estimates. Third, additional nominal contracts are considered. The empirical results indicate that time-varying firm characteristics related to inflation predominately determine the effect of unanticipated inflation on a stock's rate of return. A firm's debt-equity ratio appears to be particularly important in determining the response.

Seismic Scattering Attributes to Estimate Reservoir Fracture Density: A Numerical Modeling Study

We use a 3-D finite difference numerical model to generate synthetic seismograms from a simple fractured reservoir containing evenly-spaced, discrete, vertical fracture zones. The fracture zones are represented using a single column of anisotropic grid points. In our experiments, we vary the spacing of the fracture zones from 10-meters to 100-meters, corresponding to fracture density values from 0.1- to 0.01-fractures/meter, respectively. The vertical component of velocity is analyzed using integrated amplitude and spectral attributes that focus on time windows around the base reservoir reflection and the scattered wave coda after the base reservoir reflection. Results from a common shot gather show that when the fracture zones are spaced greater than about a quarter wavelength of a P-wave in the reservoir we see 1) significant loss of amplitude and coherence in the base reservoir reflection and 2) a large increase in bulk scattered energy. Wavenumber spectra for integrated amplitude versus offset from the time window containing the base reservoir reflection show spectral peaks corresponding to the fracture density. Frequency versus wavenumber plots for receivers normal to the fractures separate backscattered events that correspond to spectral peaks with positive wavenumbers and relatively narrow frequency ranges. In general, backscattered events show an increase in peak frequency as fracture density is increased.Eni S.p.A. (Firm)United States. Dept. of Energy (Grant number DE-FC26-02NT15346)Massachusetts Institute of Technology. Earth Resources Laborator

Financial inclusion in the Middle East and North Africa : analysis and roadmap recommendations

The paper provides an assessment of the state of financial inclusion in the MENA region, and identifies constraints, opportunities, and priorities for significantly improving access to finance. Practical recommendations for improving financial inclusion are outlined. Firstly, governments could agree a Financial Inclusion Strategy that is underpinned by improved data, that has both public and private sector commitment, and that scales up financial access on a large scale, principally through bank accounts. Secondly, the regulators should provide a legal and supervisory framework that enables access to finance to be expanded primarily through banks, but with regulatory space for the use of agents, mobile phone technology, and for a finance company model for microcredit and leasing. Interest rate caps on microloans should be removed, and instead consumer protection and supervisory capacity for microfinance should be strengthened, while prudent competition between financial service providers should be promoted. Thirdly, financial infrastructure needs to continue to be a focus area, and in particular credit information and secured transactions. Finally, barriers to the growth of Islamic financial services should be removed so that they can better meet market demand.Access to Finance,Financial Literacy,Banks&Banking Reform,Debt Markets,Emerging Markets

The status of bank lending to SMES in the Middle East and North Africa region : the results of a joint survey of the Union of Arab Bank and the World Bank

Among the principal constraints for SME lending is the lack of SME transparency, poor credit information from credit registries and bureaus, and weak creditor rights. If constraints can be addressed, lending can potentially reach bank targets of 21 percent. State banks still play an important role in financing SMEs in the MENA region, but they use less sophisticated risk management systems than private banks. On another hand, credit guarantee schemes are a popular form of support to SME finance in the region, and are associated with higher levels of SME lending. The paper concludes that MENA policy makers should prioritize improvements in financial infrastructure, including greater coverage and depth of credit bureaus, improvements in the collateral regime (especially for movable assets), and increased competition between banks and also non-banks. Weaknesses in insolvency regimes and credit reporting systems should also be alleviated. Direct policy interventions through public banks, guarantee schemes, lower reserve requirements and subsidized lending and other measures have played a role in compensating for MENA's weak financial infrastructure, but more sustainable structural solutions are needed.Banks&Banking Reform,Access to Finance,Debt Markets,Financial Intermediation,Bankruptcy and Resolution of Financial Distress

The rural non-farm economy in Central and Eastern Europe

The purpose of this paper is to identify and analyse the factors enhancing or impeding sustainable development of non-farm rural employment and income diversification for rural development in the Central and Eastern European Countries (CEEC). The paper focuses on two case studies in the Czech Republic and Romania. The paper aims to examine the extent to which the factors conditioning nonagricultural rural development are similar in the Luxembourg Group (fast-track) and Helsinki Group (slow-track) accession countries

The role of the rural non-farm sector in the reconstruction of the Balkans

The purpose of this paper is to improve our understanding of the role of the non-farm rural economy in assisting the rural reconstruction of the Balkans (specifically, Albania, Bosnia-Herzegovina, Bulgaria, Croatia, FYR Macedonia, Romania). The rural diversification, migration, employment, poverty and policy implications for this in terms of economic development and reconstruction as part of an integrated rural development strategy are crucial to both appropriate institutional and policy developments in the Balkans. We compare the Balkan States to China's Township and Village Enterprises (TVEs) because recent studies suggest that the rural non-farm economy (RNFE) may provide an important and dynamic contribution to economic growth, whether linked to the farm economy or not. While diversification into non-farm enterprise activities may provide important income smoothing and risk management strategies to rural households that are also involved in agriculture, enterprise activities located in rural towns and villages in China have eclipsed agricultural activities in terms of output and income. This paper examines the role that the RNFE may play in the development and reconstruction of the Balkan States, and seeks to identify factors from the successful Chinese TVE experience that are replicable to the Balkans. Recommendations are made concerning the policy and institutional environment that can best foster the growth of the RNFE, and the role of local government in supporting rural enterprise development

Financial services associations: The story so far. Consultative group to assist the poorest

This review reflects information available at an early stage in the development of the FSA model, with the oldest FSAs in operation for less than five years. The review therefore inevitably draws out areas needing further information, and notes that the FSA model as yet is characterised more by potential than proven achievements. This review draws initial studies and reviews conducted in Uganda, Kenya, and Benin, and on statistics produced by KREP (Kenya) and I FAD (Benin). This still rather limited data and literature base is supplemented by perspective from the experience of FSAs in South Africa, Congo, and Guinea, and by telephone and email interviews with experts

The non-agricultural rural sector in Central and Eastern Europe

During the central planning era, rural development in Central and Eastern Europe (CEE) was frequently associated with agricultural development. Recently, opinion has begun to move away from this position. Attention is now focusing on the role of the non-farm sector in the context of rural development because of this sector’s potential for absorbing excess labor from agriculture, alleviating problems caused by urban-rural migration, contributing to income growth, and promoting a more equitable distribution of income. At the beginning of the transformation process in transition countries, economic policies focused mainly on macroeconomic problems, and the increasing income disparity between rural and urban regions was ignored. We now know that the increasing inter-regional divergence in the transition economies is one of the major transformation problems. This is one of the reasons why the World Bank, OECD, and the EU have formulated special rural development strategies