strategy

Regionalizing agricultural credit

Description:
Establishing regional networks of agricultural credit systems that are aimed at enhancing the quality and quantity of credit available for low-income groups in developing countries.
Context:
Availability and access to credit by low-income families have long been recognized as a major prerequisite for development. Besides the considerable externalities that credit generates through, for example, income-earning activities of the poor, it also helps in the improvement of their living conditions, particularly housing and infrastructure provision. Problems associated with access to loans from banks and other formal institutions, and the low-income/asset- holding position of the poor themselves are two factors that require a drastic revamping of the existing systems of credit delivery. Any such move also ought to take advantage of the vast networks of credit delivery that the poor themselves have established using their own resources. Under such circumstances, a case for regional level networks is made - linking community credit groups with government agencies, NGOs and Banks so that shortcomings of the various actors can be overcome and resources shared.
Implementation:
The establishment of a Regional Association that promotes cooperation and facilitates mutual exchange of information and expertise in the field of rural finance was first proposed at a regional seminar on Agricultural Credit for Small Farmers in Asia in October 1974. The Asia-Pacific Rural and Agricultural Credit Association, (APRACA) was formed from this seminar.

The African Rural and Agricultural Credit Association (AFRACA) is promoting cooperation among governments and financial institutions in the field of agricultural credit and banking; improving the planning and management of financial arrangements aimed at rural and financial development, and establishing appropriate relationships with the international organisations and donor agencies as well as acting as a link between these organisations and AFRACA members.

Values:
Credit
Discredit
Type Classification:
G: Very Specific strategies
Related UN Sustainable Development Goals:
GOAL 2: Zero Hunger