Relatively high interest rates slows borrowing, stagnates business and creates hardships on individual borrowers. Economic policies in the industrial countries determine interest rates worldwide.
High real interest rates are adding significantly to structural budget deficits in both developed and developing countries.
The organized money-market, even if developed in agricultural regions, would tend to find that loans by verbal agreement, without security, and dependent on ability to repay based on income constantly subject to climatic hazards and price fluctuations, involve an unacceptably high risk. The unorganized money-market has the advantage of making cash readily available under conditions which official institutions would not accept.