publication . Book . Research . 2017

Seasonality of Rural Finance

Name: Seasonality of Rural Finance
Keywords: rural finance, seasonality, crop cycles, lean seasons, investment decisions, risk, financial intermediation

Hussain A. Samad; Shahidur R. Khandker; Syed Badruddoza;

Open Access

Published: 01 Feb 2017

Publisher: World Bank, Washington, DC

Country: United States

Summary

Abstract

Simultaneity of borrowing, withdrawal of savings, and loan defaults due to the pronounced seasonality of agriculture often leads to investment failure of rural financial institutions. Lack of borrowing leads to lack of in-come- and consumption-smoothing, and in turn, causes inefficient resource allocation by rural households. Financial institutions that are active in rural areas take different measures to address the covariate risks in intermediation. For example, microfinance institutions have sought various measures such as supporting non-farm activities to diversify income, introducing seasonal loans, and bringing flexibility in loan repayments to reduce non-...

doi: 10.1596/1813-9450-7986

Subjects

free text keywords: rural finance, seasonality, crop cycles, lean seasons, investment decisions, risk, financial intermediation, Consumption smoothing, Financial intermediary, Rural economics, Finance, business.industry, business, Rural area, Financial inclusion, Loan, Per capita income, Microfinance, law.invention, law

Related Organizations