Financing Agribusiness by State Development Banks - the Case of Macedonia

Kovachev, Goran (2013): Financing Agribusiness by State Development Banks - the Case of Macedonia. Published in: Journal of Governance and Regulation , Vol. 2, No. 3, 2013, Continued - 1 (September 2013): pp. 107-116.

Abstract

In countries where agriculture has substantial role in generating domestic product, sustainable agro-finance can seriously increase economic development. It is well known that agriculture is perceived as risky to be financed by commercial banks. Therefore, creating specific agro-credit lines within state development banks is key element in enhancing agricultural activities. These state development banks, 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 lending products targeted towards agriculture. The focus will be put on comparison between the first pillar – direct lending to agriculture and second pillar – lending to agriculture through commercial banks showing the better viability of the later.

• Item Type: MPRA Paper
• Language: English
• Keywords: sustainable agro-finance; agriculture; risky; economic welfare; rural development; state development banks; agribusiness; direct lending; indirect lending
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit; G - Financial Economics > G2 - Financial Institutions and Services; H - Public Economics > H8 - Miscellaneous Issues; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture

References

Dimovska Efimija – Bringing Finance to Rural People-Macedonia’s Case (working paper); EastAgri Annual Meeting; Istanbul, 2010

Macedonian Bank for Development Promotion, data from internal sources

National Bank of Republic of Macedonia – http://www.nbrm.mk

Official Gazette of Republic of Macedonia, No. 47/1996, 24/1998, 107/2000, 4/2002 145/2010 and 76/2012

Robinson Marguerite S., 2001. The Microfinance Revolution, Sustainable Finance for the Poor. The World Bank, Washington D.C

State Statistical Office of Macedonia - http://www.stat.gov.mk

Thought Leader, 2012. Mail & Guardian - http://www.thoughtleader.co.za