Issues of International Finance in Developing Countries Financial Services and the Poor - Part 1
After decades of wasted efforts to support the poor by publicly subsidized financial institutions, micro-finance is offering a new hope to engage poor but productive people in profitable business. Out of many different institutional setups, a few standouts offer a good insight of this new way of project finance on a minimalist basis.
HINWEIS: Der Vortrag ist in englischer Sprache. Das Skript zum Vortrag umfasst 6 Seiten Text.
The consequence of those observations were the establishment of government financed institutions, mainly called agricultural development banks or rural credit institutions. After independence India was the first country that – after a comprehensive survey of rural credit needs - decided to engage in large scale public sector credit programs with low interest rates, as one of the major concerns of the country’s policy makers was to stimulate investment, modernization and economic growth at the countryside, where over 80% of the population resided at that time. Most other developing countries, which believed in a strong government role if not planning to foster economic growth and welfare followed suit.
The immediate effects seemed to be positive, as millions of farmers got access to credit for the first time in their lives. However, after a decade or two, those institutions were begging for further and ever increasing government funds and were allocating their credit to ev...
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