The Impact of Financial Reform on Rural Credit in Central America

Arie Sanders and Cor J. Wattel

Chapter 7 in Agrarian Policies in Central America, 2000, pp 144-169 from Palgrave Macmillan

Abstract: Abstract Financial reform is omnipresent in Central America. Surprisingly, the financial reform policies are very similar throughout the region, although the macroeconomic and structural conditions of the Central American countries are quite diverse. The reforms all include two basic components: less direct intervention of the state in financial intermediation, and a stronger supervision of the banking system by more autonomous central banks. The basic argument put forward by the servants of the reform is that the liberalization of the financial sector, if adequately supervised, will lead to more savings, hence a broader availability of resources for credit, and generally a more efficient allocation of resources for investment, which in turn will lead to higher economic growth.

Keywords: Interest Rate; Banking Sector; Informal Sector; Rural Household; Credit Market (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-333-98270-9_7

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DOI: 10.1057/9780333982709_7

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