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Financing Agribusiness by State Development Banks - the Case of Macedonia

Goran Kovachev ()

MPRA Paper from University Library of Munich, Germany

Abstract: In countries where agriculture has substantial role in generating domestic product, sustainable agro-finance can seriously increase economic development. It is well known that agriculture is perceived as risky to be financed by commercial banks. Therefore, creating specific agro-credit lines within state development banks is key element in enhancing agricultural activities. These state development banks, operating in close collaboration with the Government have a significant role in accelerating economic welfare of farmers and rural poor. This study tends to emphasize the importance of creating special lending products targeted towards agriculture. The focus will be put on comparison between the first pillar – direct lending to agriculture and second pillar – lending to agriculture through commercial banks showing the better viability of the later.

Keywords: sustainable agro-finance; agriculture; risky; economic welfare; rural development; state development banks; agribusiness; direct lending; indirect lending (search for similar items in EconPapers)
JEL-codes: E5 G2 H8 Q1 (search for similar items in EconPapers)
Date: 2013-09, Revised 2013-09
New Economics Papers: this item is included in nep-agr, nep-mac and nep-nps
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Published in Journal of Governance and Regulation 3, 2013, Continued - 1.2(2013): pp. 107-116

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