Overview

Affordable financial services to the rural population have been a prime component of development strategy for the past several decades. This paper outlines the traditional approach to rural finance, which relied heavily on supply-led, state-owned, agricultural credit institutions. It then illustrates an emerging new approach that focuses on promoting rural financial markets within the context of rural development and presents criteria for assessing rural finance institutions. The paper reviews and analyzes the performance of three successful rural institutions: the Bank for Agriculture and Agricultural Cooperatives in Thailand, Bank Rakyat Indonesia, and Grameen Bank in Bangladesh.

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