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Rural Finance

Financial services are key to enhancing economic development and reducing poverty in rural areas. However, access to key financial services such as savings, credit insurance, leasing and remittance facilities is generally scarce in rural areas of most developing countries. Access is particularly limited for poor households and for micro, small, and medium enterprises.

General characteristics of rural areas such as poorly developed infrastructure, dispersed economic activity, and inadequate availability of skilled personnel constrain the provision of financial services in rural areas. Inadequate knowledge among service providers of operating in a rural environment and insufficient products tailored to rural needs makes the availability of financial services in rural areas scarcer. Additionally, the supply of credit services is limited by the lack of collateral and lack of risk management mechanisms.

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Rural Finance Highlights