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Special agricultural microfinance organizations - Macedonian Experience

Goran Kovachev ()

MPRA Paper from University Library of Munich, Germany

Abstract: In countries where agriculture has substantial role in generating domestic product, sustainable microfinance can seriously increase economic activities and hence rural development. It is well known that agriculture is perceived as specific and risky to be financed by banks. Therefore, creating a specific sustainable microfinance (sometimes state owned) institutions is key element in enhancing rural and agricultural activities. These organizations together with banks and other small-scale financial institutions 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 microfinance institutions targeted towards strategic economic sectors such agriculture, with a focus on Agricultural Credit Discount Fund - a separate unit within the Macedonian Bank for Development Promotion that administers a credit line created to support Macedonian agribusiness. The ACDF’s ‘modus operandi’ is a guideline to every similar potential organization, as it creates prerequisites for easier access to microloans and increased income to its beneficiaries. The outstanding portfolio performance, fulfillment of the objectives and good impact on stakeholders is strong confirmation to this claim.

Keywords: sustainable microfinance; agriculture; high risk; economic welfare; rural development; special institutions; Agricultural Credit Discount Fund; microloans; agribusiness (search for similar items in EconPapers)
JEL-codes: G2 H81 Q1 (search for similar items in EconPapers)
Date: 2013-10-24, Revised 2013-10-24
New Economics Papers: this item is included in nep-agr and nep-mfd
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Published in International Center for Business Research October 2013 (10).2(2013): pp. 1-11

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