Rural Finance: Sector Strategy (2002)

The principal purpose of the Rural Finance Strategy (GN-2123-3) is to orient the operational staff of the Bank responsible for designing rural finance projects. The objective of the Bank on this area is to promote the provision of efficient, broadly based, and sustainable rural financial services. In order to achieve this end, actions are being proposed in three areas: (1) creation of a favorable economic, legal, and financial regulatory environment; (2) creation of sustainable and efficient financial intermediaries dedicated to serving rural areas; and (3) promotion of new financial services, such as insurance, leasing and factoring, in those markets where the first two actions are well advanced. Main issues that hamper the growth and development of more complete and efficient rural financial markets and how the Inter-American Bank can best promote and support market-based reforms are addressed. The strategy focuses on how to improve access to four specific financial services: credit, deposits, insurance, and payments transfers. The primary, but not exclusive, target group is low- and moderate-income rural entrepreneurs involved in both farm and nonfarm productive and commercial activities.