A leading concern in rural finance is the availability of credit to the farmers and fishermen. The high risk in crop failure and costly transaction expenses in lending made banks shy away from small borrowers. Thus farmers and fishermen borrow from private informal lenders. Liberalization of the banking system could provide an environment conducive to expanding credit so that efforts to stimulate agricultural investment in the countryside will be successful.
Bacani, Estanislao Urge Liberalization of Banking System
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