Agricultural Credit in Latin America: A Critical Review of External Funding Policy

During the 1960's aid agencies channelled over one billion dollars to agricultural credit systems in Latin America. This plus local funds boosted the real value of rural credit by 12 percent per year. A number of assumptions underlying past credit policy are critically examined. It is argued that currently credit shortage is not the most pressing issue. Rather, emphasis should be placed on realistic pricing of rural credit and mobilizing rural savings for credit use through interest incentives.