M5101: Prof. Heidhues + Tom · 2009. 4. 14. · M5101: Prof. Heidhues + Tom 2 Universität Hohenheim, Institut 490a 3 WS 2003/04 Rural Finance: Thomas Dufhues and Prof. Franz Heidhues

M5101: Prof. Heidhues + Tom

1

Universität Hohenheim, Institut 490a 1

Rural Finance

Thomas Dufhuesand

Prof. Franz Heidhues


WS 2003/04 Rural Finance: Thomas Dufhues and Prof. Franz Heidhues

Structure of the lecture

1. Rural financial system1.1 Formal1.2 Informal1.3 Formal vs. informal credit

2. New Institution Economics (NIE) aspects in rural finance

3. Financial services3.1 Credits

- Traditional agricultural credit- „Micro finance revolution“

3.2 Savings3.3 Insurances3.4 Safety net of MF

(credits, savings, insurances)4. Financial innovations


2



Government, Central Bank

Financialmarketpolicy

Monetarypolicy

Tradepolicy

Exchange rate

relations

Rural infra-

structure

Agriculturalsector

Extensionsystem

Off-farmactivitiesFormal

Semi-formal

Informal

Insured party

BorrowerSaver

Rural financial market

Financial intermediaries

The rural financial subsystem

Source: Adapted from Buchenrieder, Heidhues, and Dung (2000)

1. Rural financial system1.1 Formal1.2 Informal1.3 Formal vs. informal2. NIE in rural finance3. Financial services3.1 Credits

- Agricultural credit- Micro finance

3.2 Savings3.3 Insurances3.4 Safety net of MF4. Financial innovations



Regional transformationSectoral transformationSocial transformation

Size transformationTime transformation

Information transformation

Risk transformation

Intermediation

Financial assettransformation

Financial DepthWidth of financial instruments

Diffusion Promotion of financial asset accumulation

Effects:Functions:

Increase in theefficiency of resource

allocation

Promotion offactor mobility

Provision of afinancial

infrastructure

Setting monetary policy

Enforcement of financialdiscipline in the

enterprise sector

Framework for structural adjustment

Economicstability

Form of Implication:

Major functions of theformal financial system

Source: Adapted from Geis (1975)





3



The traditional reason forformal agricultural credit

Traditional approach towards agricultural credit




S

Y

P

I

Vicious cycle of capital formation- A descending spiral -

Source: Heidhues and Schrieder (1999)

Y = Yield/income

S = Savings

I = Investment

P = Productivity



Y

S P

I Traditional approach towards agricultural credit

The rising cycle of capital formation- An ascending spiral -

The traditional reason forformal agricultural credit





4



Who are the informal intermediaries?

Definition of formal finance:

Formal financial intermediaries (FFI)?

• All intermediaries under control of the central bank

• Usually all banks and institutions which are collecting savings

• Family members or friends

• ASCAS/ROSCAS

• NGOs

• Traditional money lenders

• Deposit collectors

• Pawnbrokers

} Non-profit segment

} Profit segment

Forward1. Rural financial system1.1 Formal1.2 Informal1.3 Formal vs. informal2. NIE in rural finance3. Financial services3.1 Credits



Next



Rotating savings & credit associations(RoSCAs):

Note: All RoSCA members contribute the same amount at their periodic group meeting (Four members: A, B, C and D)

RoSCA members and their contribution

A B C D Σ of individual contributions

50505050

50505050

50505050

50505050

200200200200

Σ of contributions received by individual member

200 200 200 200

Σ of net loan received by individual member

150 100 50 0





5



RoSCAs and ASCAs pros and cons

- generally relatively short-term oriented

- cumulative credit needand no interregionalinter-mediation (fragmentation)

- operating outside governmental/central bank policy

+ low cost+ high repayment rates+ need orientation+ unbureaucratic, quick

loan decision process+ no collateral+ mutual insurance

system

conspros

Back






Credit worthiness

Credit disbursement is the process of the temporary allocation of resources (financial means) with the expectation that they will be repaid.

Collateral Character Capacity to repay

Goods

Freedom/obligationto select

Credit worthiness(3 essential Cs)

Persons Credit history

Personal background

Income streams

Legal obligations




Invest-ment


6



• Past repayment record

• Social status

• Acquaintance

• Employment status

• Guarantee

• Recommendation

• Collateral

Borrower evaluation ofinformal credit markets

Borrower evaluation offormal credit markets• Collateral

• (Guarantee)

• (Past repayment record)






Cost of credit extension (formal)

For the credit institution For the borrower

• Costs of finance: costs of procurement of funds

• Transaction costs− staff remuneration− material costs− reserves

= Total costs for the credit institution

+ profit margin

= Market rate of interest (including fees etc.)

• Costs of finance: interest payment to the credit institution

• Transaction costs− transport− opportunity costs of

time− costs of advice and

procurement of information

− securities, guarantees− certificates (certificate

of residence, employment, good standing etc.)

= Total costs for the borrower





7



Cost of credit extension (informal)

For the credit institution For the borrower

• Costs of finance: costs of procurement of funds

• Transaction costs− staff remuneration− material costs− reserves

= Total costs for the credit institution

+ risk margin+ profit margin

= Market rate of interest (including fees etc.)

• Costs of finance: interest payment to the credit institution

• Transaction costs− transport− opportunity costs of

time− costs of advice and

procurement of information

− securities, guarantees− certificates (certificate

of residence, employment, good standing etc.)

= Total costs for the borrower






Informal vs. formal finance

Informal financial sector Formal financial sectorAdvantages Disadvantages Disadvantages Advantages

Informal financial sector

• closeness toclients/members

• little bureaucracy• flexibility• low TCs

• short-term financialproducts

• savings eventuallyinsecure

• low, locally limitedcapital mobilization,fragmentation

• little cost efficiency• little closeness toclients

• political influencepossible

• bureaucraticprocedures

• monetarisation, i.e.systemic savingsmobilization

• economicdevelopment

• High volume andlong-term loanspossible

Formal financial sector

Advantage economic organizational / institutional

Disadvantage organizational / institutional economic





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1. Are the services provided by informal lenders "valuable" for their clientele?

The answer is a strong “yes“.

2. Are the services provided by informal lenders "sufficient," from the perspective of their clientele?

Under many circumstances, the answer in this case is possibly “no“.

3. Are informal financial services "efficient" from an economic perspective?

The answer here is a strong “no“.

4. Can informal financial transactions be replaced and/or complemented with formal financial intermediation?

The answer is “potentially yes“, but the task is not easy at all.

The efficiency of informal finance






Definition of Transaction Costs (TCs)• The cost that arise when individuals exchange property

rights (PR) to economic assets and enforce their exclusive rights.

• TCs include all expenses and opportunity costs, fixed and variable, which arise in the exchange of PRs, except the price of the PR itself.

• TCs decrease the efficiency of exchange relationships. The regulatory framework of institutions shall reduce TCs and raise the efficiency of exchange.

• In New Development Economics,TCs are considered to be of substantial interest for development finance.




Importance of TCs in Development(Micro)-finance


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Arising beforethe transaction

Mostly related to searching for and

screening ofpotential trading

partners andobtaining price

information

Arising duringthe transactionIncluding costsof arranging the

transactions,physically

transferring theproduct or

service, anddrawing upcontracts

Arising afterthe transactionIncluding costs

of monitoring theterms of the

transaction andenforcing liability

MFIs

Clients

Informationcosts

Negotiationcosts

Enforcementcosts

Classification of TCs






• Financial services contracts are relational contracts• The transaction takes place over a long period of time • Transaction is based on the promise of the two contract

partners• Trust is an important factor in relational contracts

• One party to an agreement has better information on the matter of contract then the other

TCsMFIs HHs

Information cost

Relational contracts

Information asymmetry

• All relational contracts are hit by information asymmetry• The costliness of information is the key to the costs of

transaction. Thus, reducing the cost of information means reducing TC.





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• Adverse selection means that one party to a contract is unable to measure accurately certain valued human qualities or attributes of non-human resources that he or she seeks to acquire.

Adverse selection

• Moral hazard occurs, e.g. when a party to an insurance contract changes his behavior after the purchase of insurance in that way that the change increases the likelihood that policy holders will collect insurance indemnities.

Moral hazard 1. Rural financial system1.1 Formal1.2 Informal1.3 Formal vs. informal2. NIE in rural finance3. Financial services3.1 Credits



adverse selection moral hazardex-postex-ante

Tran

sact

ion



Source: Buchenrieder, Heidhues, and Dung (2003)

Financialmarket

Credit Savings

Insurance

The product triangle of rural finance

Financialmarket

Credit Savings

Insurance


Vogel‘s (1984)forgotten half of microfinance in the 1980s

Financialmarket

Credit Savings

Insurance


Vogel‘s (1984)forgotten half of microfinance in the 1980s

Zeller et al. (1997) termed insurance as the forgotten third in the 1990s





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Key features of the traditional agricultural credit extension

1. External (to the rural sector) financing by government

and external donors

2. Production credit (supervised credit, targeted credit)

3. Strong focus on credit; no savings mobilization

4. Subsidized credit (low interest rate)

5. Collateral to overcome information asymmetry1. Rural financial system1.1 Formal1.2 Informal1.3 Formal vs. informal2. NIE in rural finance3. Financial services3.1 Credits





Why was the traditional agricultural credit approach not successful?

No capital mobilization (savings)lack of independenceGov. influence undermines institutional independence

Uncertainties of external funding (government, donors)

Linkage between government funding and repayment performance

Did not reach the target group

Distortions caused by subsidized credit





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Effects of low interest rate policy

1. Weakening of rural finance institutions

2. Adverse allocation effects

4. Distribution effect, regressive

5. Low savings interest rate(often negative, below inflation)

economic andpolitical power

lower cost/larger loans

3. Non-market (non-price) rationing




Forward

Next



Misallocation of funds




i

i*

i**

i* = market interest ratei** = subsidized interest rate

Investments


13



Adverse employment effects




Lopt

Labor

CapitalCopt

Isoquante

Iso-cost-function



Adverse employment effects




Lopt

* = subsidized interest rate

Labor

CapitalCopt

Lopt*

Copt*

Back

Iso-cost-function*

Isoquante


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average transaction cost per lent unit of money

averagecost per loan

small-scale-farmers medium-size-farmers large-scale-farmers

Selection of borrowerstowards bigger farmers

Back






S

D

i

Credit

i*

i**

S** D**i* = market interest ratei** = subsidized interest rateE* = equilibrium

E*

Effects of an imbalancein supply and demand

Back





15



Nominal and real rate of interest

100111

×

−

++

=pir

Example: i=18%, p=12%

%36,5100)10536,1(

100112,118,1

=×−=

×

−=r

The real rate of interest is equal to the nominal rate of interest minus the effects of inflation.

The real rate of interest (r) is derived from the nominal rate of interest (i) and the inflation rate (p) according to the following formula:






“As a rule, lending to agriculture is more expensive than lending to commerce and industry and lending to small farmers is more expensive than lending to others”

1. Riskier because of relatively undiversified loan portfolio, mainly agriculture

2. Riskier because of the productive risk of agriculture, droughts, floods, diseases etc.

3. Usually thinly populated areas with bad infrastructure

4. Small amounts of loans are required (see page before)

Reasons for high costs inagricultural lending





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The new approach to rural finance- The microfinance revolution -

1. Financially sustainable and independent financial organizations

2. Ensure outreach to the whole spectrum of the rural population

3. Implementation of client adapted financial services (see last chapter)

4. Implementation of savings instruments

5. New forms of collateral, e.g. group credit, savings, leasing...

Forward

Forward

Forward

Forward1. Rural financial system1.1 Formal1.2 Informal1.3 Formal vs. informal2. NIE in rural finance3. Financial services3.1 Credits



Next



1. Sustainability Back

Why sustainability? • The poor value secure but more expensive access to credit

higher then cheap but uncertain access• Unsustainable FFI are a drain of public resources• Non-performing loans leaving behind a burnt soil for any

viable rural financial intermediationHow to achieve sustainability?• Savings collection for being independent from external

funds which tend to end at some point of time• Covering costs is essential:

a) cost covering interest rate, b) full/high repayment rate, andc) organizational efficiency (low hierarchies, de-central decision making)




BUT: Despite best practice, the vast majority of MFIs (95-99%) does not meet the criteria for sustainability (financial oreven operational)


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2. Outreach

• supports rural growth and food security

• it improves an equitable income distribution

• it enhances portfolio diversification of the rural finance institution and reduces risk

• Depth of outreach: high share of women, poorest, ethnic minorities etc.

• Breadth of outreach: reaching huge numbers of target group people

While outreach is used from the perspective of the financial program and access is used from the point of view of the potential client, they both refer to the same thing: who is getting the credit (Vaessen 2001).






Targeting - Exante• Potential clients are assessed ex ante, e.g. by living

standard or farm sizeProblemUsually quite expensive and time consuming, as every new customer has to be assessed Potentially open to corruption

Product design• Designing of financial services exactly tailored to the

needs of the target group and thus, are not demanded by other groups of the population

• This requires extensive market research before the product designProblemCritics say, that with product targeting alone the very poor can not be reached

2. Outreach - How to reach the target group?





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• Some theorists argue there is a trade-off between sustainability and outreach

the costly information collection on the credibility of potential clients and long distances in sparsely populated regions

• Counter example: e.g. BRI (Bank Rakyat Indonesia) has an enormous outreach and is covering its operational costs

• Sustainability enables rural MFIs to serve significant/more numbers of low-income clients over time

• MFIs try to operate in a so called ‘win-win pro-position’: The poor benefit from the financial services provided, willingly to pay high interest rates/fees to obtain them, which permits the MFIs to provide the services on a sustainable basis.

• Sustainability is based on the reasoning that sustainability today will mean more outreach and impact tomorrow

2. Outreach vs. Sustainability Back






4. Reasons for MFI to offer savings Back

• Achieving independence from external funds

• Improving the internal organizational efficiency

• Close contact to the target group

• Gathering of relevant information for granting credits

• Improving outreach

• Collateral

1. Rural financial system1.1 Formal1.2 Informal1.3 Formal vs. informal2. NIE in rural finance3.1 Credits




19



Why are banks asking for collateral?• Relational contracts, information asymmetry, moral

hazard problem• Collateral insures the lenders’ loan portfolio in case of

borrowers’ default. It represents an incentive of the borrowers’ willingness to repay.

Traditional collateral• Land titles, mortgages, wages, capital assets• FFIs typically resort to legal options, such as seizing

property or garnishing wages directly from the employer.

• MFIs lend to low-income clients who usually have very few assets. Consequently, traditional collateral is often not available.

5. Collateral






The mechanism of collateral• Often, simply the risk of legal repression is enough to

encourage repayment.• Regardless of the actually value of the asset, the act

of pledging assets and the consequent realization that they can be lost causes the client to repay the loan.

• Even if the collateral is almost never collected, this does not signal its lack of importance. Few instances when collateral is actually collected are sufficient.

Back5. CollateralSubstitutes of traditional collateral• Joint liability groups• Compulsory savings• Social collateral or character-based lending• Assessment of the investment• Credit history• Any kind of property, e.g. animals, furniture





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Reasons for households to save

1. Income smoothingSafeguards against uneven income streams due to seasonal variations

2. InsuranceProvisions against disability, disease, retirement, sudden income losses and other contingencies

3. Wealth accumulationFinancing household’s long-term goals (social and religious purposes, heritage, consumer durable)

4. Future investments

5. Financial reciprocity or social reciprocityThe possibility of using savings to gain access to credit or other services




Forward

Next



The need for income smoothing

Cash flow within the lunar year of anethnic minority in Northern Vietnam

0

1

2

3

4

5

6

1 2 3 4 5 6 7 8 9 10 11 12

Lunar month

Mon

etar

y un

it

Back




ExpenditureIncome


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Formal and informal savingsFormal savings




• Bank accounts• Certain insurances• StocksInformal savingsIn kind:• Animals (cows, goats, pigs, chickens etc.)• Grain (maize, rice etc.) and commodities (beans,

coffee etc.)• Construction materials (bricks, wood, etc.) • Jewelry or goldIn cash:• Money collectors• Reciprocal lending (e.g. RoSCAs)• Under the pillow



1. Transaction costsTCs incurred on transforming available surplus into a specific savings option or on liquidating it

2. LiquidityTime of liquidating the saving option in case of need

3. Real interest ratesRemunerations of the saving option

4. DivisibilityPossibility of parting of the savings in different sizes

5. SafetyHow secure are the savings stored?

6. Trustworthiness and confidence

7. Piggy bankLocking money away from relatives and friends

Decision parameters for choosing asaving option





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Importance of savings

“For the poor, access to saving products may be more important then credit (Zeller 2001).”

“In institutions which offer unbiased savings and credit services, the number of savers exceeds the number of borrowers by a wide margin (Seibel 1999).”The most successful saving product:

- voluntary- close proximity to the clients- positive real interest rates- (quickly accessible in case of need)

BUT: Locking away of savings in formal deposits may decrease the depositor’s access to financial support from the social environment in times of scarce resources. Social cohesion as well as individuals’ safety nets may be disrupted






Micro-Insurance“Many households borrow, more save, and all insure (Zeller 2000).”

• Formal insurance schemes in most developing countries not available, particularly not for the rural population

• Particularly poor households enter into various forms ofinformal self-insurance or co-insurance arrangements

• Informal insurance arrangement are important but at the end not sufficient

Insurance in rural finance:• Relatively new product in rural finance• During the 80s many experiments in developing countries

with crop insurance schemesBUT: All failed and immense public resources were wasted

• Today many MFIs also offer micro-insurances, e.g. live insurances, disability insurance, health insurances

• MFIs sometimes offering a compulsory investmentinsurance to secure their portfolio





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• Moral hazard problems, particular for property insurances and crop insurances

• Totally different business compared to credit and savings• Danger of bankrupting an MFI in a single catastrophic event• Professional expertise from insurance companies is

inevitable• The absence of insurance possibilities limits the households’

ability to reduce consumption fluctuations, but this does not necessarily imply that the most effective intervention would be to set up insurance programs

• Providing open access to savings and (emergency) loans may be a preferable method for helping clients to manage risk.

• If potential MFI‘s clients do not yet have access to flexible savings and credit, providing insurance may be premature.

Challenges of micro-insurance in MF






The safety net of microfinance

• Open access savings and emergency loans act as a form of insurance

• Credit and savings products cannot provide complete protection against risks resulting in a loss greater than what a household can save or repay

at this point, insurance becomes a more effective method of risk management

• Some risks cannot be insured and there are some risks where insurance is technically possible but may not be the most appropriate tool

• Different risks require different financial services with specific features:There is no „one fits all“ solution!!!




Forward

Next


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‘ Saving down’

‘ Saving up’

‘ Saving through‘

Pay

- out

Pay

- inCash flows of different financial products

Source: Rutherford (2000)




Back



„The Schumpeterian qualification, that innovation must be cost reducing, separates change from innovation (Von Pischke 1995

p.121).“

Categories of financial innovations




1. Innovations in the macro-financial system

2. Innovations at the level of the financial intermediary

3. Innovations in organizing financial intermediation

4. Financial product innovations


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• Innovations at this level change the system as a whole.• They may contribute to the outreach of financial

intermediation and are generally applied at the policy level.

Examples: ⌦ Changes in the legal and regulatory framework

⌦ Establishment and acceptance of new organizational forms of financial intermediaries

Innovations in the macro-financial system allowed NGOs to take up financial intermediation activities in many countries which was illegal before

(1) Innovations in the macro-financialsystem






• Innovations at the level of the financial organization refer to changes in their legal form or organizational form.

• These innovations may increase access to financial services through economies of scale and specialization; mistrust may be reduced through a better organizational compatibility with existing organizational forms.

Examples: ⌦ Transformation of an informal into a registered or formal financial organization

⌦ Changes in the hierarchical structure, decentralization

⌦ Market differentiation through the creation of specialized outlets which, e.g. cater particularly to SMEs

(2) Innovations at the level of thefinancial organization





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• Innovations in the areas of administration, monitoring, and management of financial contracts may increase efficiency through a reduction of transaction costs.

• Often, technical progress plays a role when adoptingproductivity increasing innovations.

Examples: ⌦ Monitoring Software specifically for small-scale clientele

⌦ Simplification of used forms⌦ Participatory marketing

approach

(3) Innovations in organizing financialintermediation






• Innovative financial products reflect new or modified products.

• They may improve the operational and financial sustainability of the financial intermediary and may be better adapted to the demand of the clientele.

• Gaining new market segments and improving outreach

Examples: ⌦ different forms of savings contracts

⌦ supply of insurance contracts⌦ consumption loans, input loans,

loan volume and time horizon of loans according to market rates

Rural Credit Project of the Bangladesh Rural Advancement Committee (BRAC) offers life insurance policies

(4) Financial product innovations





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Building of rural financial markets Dos

(innovative approaches)Don'ts

1. Mobilization of savings; savings as collateral

2. Implementation of alternative forms of collateral, e.g. joint-liability groupsCredit/saving allocation at the local level (decentralization)

3.

4. Integration of women (outreach)5. Building of guarantee and

emergency funds 6. Unconventional enforcement of

repayment (exclude group from access to further loans, seizing of group savings, etc.)

7. Cover costs (sustainability)8. Credit/savings/plus approach, i.e.

offering of agricultural extension in addition to savings and credits

1. Start from the beginning with cold money, i.e. (exclusively) funds by the government or international donors

2. Subsidizing of interest rate(but support of institution building often indispensable)

3. Credit as appendage to a production project

4. Politically motivated debt relieve

5. Use of extension workers as debt collectors




Market research9.Integration or connection to the formal financial market

10.

6. Do not use blue prints, especially not from other countries



Recommended literature for first steps inthe field of rural (micro) finance

Ledgerwood,J. 1999. Sustainable banking with the poor - Microfinance handbook - An institutional and financial perspective, Washington DC, USA: The World Bank.

Robinson, M.S. 2001. The microfinance revolution - Sustainable finance for the poor. Washington DC, USA: The World Bank and Open Society Institute.

Rutherford, S. 2000. The poor and their money. New Delhi, India: Oxford University Press.

Pischke, von, J.d. 1991. Finance at the frontier – Debt capacity and the role of credit in the private economy. EDI Development Studies. Washington DC, USA: Economic Development Institute and The World Bank.

Pischke, von. J.D, Adams, D.W. and G. Donald. 1983. Rural financial markets in developing countries. EDI Series in Economic Development. Washington DC, USA: Economic Development Institute and The World Bank.

http://www.cgap.org/

http://www.microfinancegateway.org/

http://www.alternative-finance.org.uk/en/

http://econ.worldbank.org/


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Literature used for this lectureBuchenrieder, G., Heidhues, F., and P.T.M. Dung. 2000. Rural finance and sustainable rural development in

Northern Vietnam - Research proposal submitted to Deutsche Forschungsgemeinschaft (DFG). Stuttgart, Germany: University of Hohenheim, The Uplands Program.

Buchenrieder, G., Heidhues, F., and P.T.M. Dung. 2003.Risk management of farm households in Northern Vietnam. Research proposal submitted to Deutsche Forschungsgemeinschaft (DFG). Stuttgart, Germany: University of Hohenheim, The Uplands Program.

Geis, H.G. 1975. Die Rolle der finanziellen Infrastruktur bei der Kapitalbildung. In: Priebe, H. (ed.): Eigenfinanzierung und Entwicklung. Berlin, Germany: Duncker und Humboldt.

Heidhues,F. and G.Schrieder. 1999. Rural financial market development. Research in Development Economics and Policy Discussion Paper No 1. Stuttgart, Germany: Grauer Verlag.

Pischke, von, J.D. Analytical and public policy issues in promoting innovation in rural financial markets. In Special issue: Innovative approaches to rural financial market development. (ed Heidhues, F). Quarterly Journal of International Agriculture 34 (2): 121-131

Rutherford,S. 2000. Raising the curtain on the 'microfinancial services era'. Small Enterprise Development11 (1): 13-25.

Seibel, D. 1999. Outreach and sustainability of rural microfinance in Asia: Observations and recommendations. Rural Finance Working Paper No A5. Rome, Italy: International Fund for Agriculture Development (IFAD).

Vaessen,J. 2001. Accessibility of rural credit in Northern Nicaragua: The importance of networks of information and recommendation. Savings and Development 25 (1): 5-32.

Vogel, R., 1984. Savings mobilization, the forgotten half of rural finance. In: Adams, D. W., Graham, D., Von Pischke, J. D. (Eds.): 248-265. Undermining rural development with cheap credit. Boulder, USA: Westview Press.

Zeller, M. 2001. Promoting institutional innovation in microfinance - Replicating best practices is not enough. Development and Cooperation (1): 8-11.

Zeller,M. and M. Sharma. 2000. Many borrow, more save, and all insure: Implications for food and microfinance policy. Food Policy 25 (2): 143-167.

Zeller,M., Schrieder,G., Braun von,.J., and F. Heidhues. 1997. Rural finance for food security of the poor: Concept, review, and implications for research and policy. Food Policy Review No 4. Washington DC, USA: International Food Policy Research Institute (IFPRI).



FinancialMarket

Credit Savings

Insurance

Steps to select a topic for a seminar paper:1. Germans select a country (developing or transition) of their choice,

all others should take their home country2. You may select a rural financial service (see rural finance triangle) or an

FFI of the country3. Select the sector (formal or informal) and/or specific financial institution4. Discuss strengths and/or weaknesses of sector and/or financial institution5. Use the templates of the institute6. Not more then five pages (incl. tables, figures & references)

Assessment of strengths & weaknessesof selected rural finance issues:Implications for the future

Source: Buchenrieder, Heidhues, and Dung (2003)

If you have questions while preparing the seminar-papers you can contact me under:[email protected] can find me in the office of Dr. Gertrdu Buchenrieder.

Documents

M5101: Prof. Heidhues + Tom · 2009. 4. 14. · M5101: Prof. Heidhues + Tom 2 Universität Hohenheim, Institut 490a 3 WS 2003/04 Rural Finance: Thomas Dufhues and Prof. Franz Heidhues