Mobilizing rural deposits: Discovering the forgotten half of financial intermediation*

Paper presented at the ‘IV Seminario sobre problemas e perspectivas da agricultura’ at the Escola Superior de Agriculture ‘Luiz de Queiroz’, Piracicaba, Brazil, 18‐20 October 1988.

Past agricultural credit programs and policies have generally ignored rural deposit mobilization. In recent years, however, there has been a greater recognition of the need for and benefits of mobilizing more rural deposits for use in agricultural lending.

This paper presents information on six questions: Why was rural deposit mobilization forgotten? Why is deposit mobilization important for rural financial institutions? What is the potential for mobilizing rural deposits? What factors contribute to rural deposit mobilization? What is the outcome of recent experimental projects to mobilize rural deposits? What are the key remaining issues to be addressed in rural deposit mobilization?

Notes

Professor, Department of Agricultural Economics and Rural Sociology, The Ohio State University, Columbus, Ohio. I acknowledge with appreciation the assistance and ideas received over several years from Dale W Adams, Carlos Cuevas, Douglas H Graham, Claudio Gonzalez‐Vega, Bob Vogel and J D Von Pischke in our study of rural finance, and the financial support provided by the Office of Rural and Institutional Development, Bureau for Science and Technology, AID. I also appreciate the opportunity given to me by my friend and colleague of many years, Paulo F C de Araujo, to present this paper. The normal disclaimers apply.

Paper presented at the ‘IV Seminario sobre problemas e perspectivas da agricultura’ at the Escola Superior de Agriculture ‘Luiz de Queiroz’, Piracicaba, Brazil, 18‐20 October 1988.