Private Enterprise and Financial Markets > Micro, Small and Medium Enterprise

Seminar: Promising Practices in Rural Finance

(09/00, SDS/MSM, En, Es)

PRESENTATIONS

Introduction:

The main purpose of seminar was to share findings of a research project on emerging best practices in the delivery of rural financial services in six Latin American and Caribbean countries: Bolivia, Chile, Costa Rica, El Salvador, Jamaica, and Peru. Other purposes included receiving feedback about the applicability of the research findings and stimulating a dialogue among operational staff of the IDB and other interested parties on appropriate areas for action and types of rural finance operations to pursue in the near future.

Rural Financial Markets in most Latin American and Caribbean countries, despite recent financial sector deregulation and previous attempts to strengthen rural lenders, do not function effectively. The event will highlight the challenges faced in providing efficient and sustainable rural financial services and present case studies of various organizations and special financial arrangements that demonstrate high potential for attaining sustainability, serving a broad number of rural clients, and meeting pent-up demand for new ways to manage risk and liquidity.

The seminar:

Reviewed the lessons learned in IDB's rural finance projects.

Presented a conceptual framework that explains the observed problems of shallowness, segmentation, and inefficiency.

Analyzed the regulatory and legal framework that best facilities rural finance in four countries.

Highlighted several cases of successful rural financial intermediation by commercial banks, finance companies, credit unions, non-governmental organizations, and new product development, including savings, leasing of agricultural equipment, rural credit cards, and the linking of credit, technical assistance, and agricultural marketing services.