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125 Int'l Lab. Rev. 447 (1986)
Banking for the Rural Poor: Lessons from Some Innovative Savings and Credit Schemes

handle is hein.journals/intlr125 and id is 461 raw text is: International Labour Review, Vol. 125, No. 4, July-August 1986 Banking for the rural poor: Lessons from some innovative savings and credit schemes Philippe EGGER * Introduction Credit has long been regarded as a key element in agricultural development strategies. The modernisation of agriculture is so dependent on the adoption of new technologies and the use of better seeds, fertilisers, pesticides and farm implements that without effective financial facilities innovation and growth are hardly possible. Indeed, in many countries the inadequacy of such facilities proved to be a major stumbling-block to the Green Revolution and similar experiments. Small farmers have little access to institutional credit, and the banking community has shown little enthusiasm for expanding its network in rural areas. The gap has been partially filled by specialised programmes. For specialised agricultural banks, large-scale development projects, co- operative institutions and even small non-governmental organisations, credit has become a preferred tool for promoting development, no doubt largely because of the flexibility associated with its delivery. Most major agricultural development projects contain an essential credit component, and many smaller projects operate some sort of credit facility or revolving loan fund. Moreover, credit is widely used not only for agricultural modernisation but also in projects to increase the level of employment and income among the rural poor. However, these interventions, whether big or small, are seldom wholly satisfactory. They often reach only a small part of the rural population, grant credit at unrealistically low rates of interest and operate only for a limited time. While many have introduced valuable innovations in banking for- malities and procedures and in organisational structures, they have not, as a rule, prompted the banking system to face up to the needs of the vast majority of the rural population who are generally forced to rely on informal and often exploitative sources of credit. * International Labour Office. This article could not have been written without the guidance provided by my colleagues Dharam Ghai, Anisur Rahman and Rounaq Jahan, which I gratefully acknowledge here. Copyright © International Labour Organisation 1986

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