Microfinance and Agriculture:Issues and Directions

In the 1980s, the failure of the government led credit supply gave way to a new paradigm and a renewed approach to rural and agricultural finance in developing countries. State owned development banks closed, financial sectors were liberalised and microfinance evolved in developing countries. However, credit for agriculture through microfinance was low despite the sector's growth. In this paper, country-specific experiences regarding the role of microfinance for promoting agricultural sector has been analysed. Case studies are drawn from India, China, Phillipines, Kenya and Benin. The paper views that microfinance has key role in streamlining agriculture sector through the provision for post harvest losses, extension services, input supply, value chain, retailing, etc.'