Beyond Microfinance: Building Inclusive Rural Financial Markets in Central Asia

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The foreword to this book notes that rural Asia presents a paradox: poverty in Asia retains a markedly rural dimension but, at the same time, economic opportunities abound throughout rural areas of Asia. Robust, inclusive financial markets, it argues, can help people take advantage of economic opportunities, build assets, manage risks, and reduce their vulnerabilities to external shocks and, in so doing, help people living in rural areas improve their welfare.

The book presents findings from a recent research into the state of rural financial systems in six Central Asian republics: Azerbaijan, Kazakhstan, Kyrgyz Republic, Mongolia, Tajikistan and Uzbekistan. The book examines and analyzes the current status of rural financial markets in these countries and attempts to answer a fundamental question: what can be done to develop robust inclusive rural financial markets? It also highlights the need to go beyond microfinance to develop inclusive rural financial markets within the context of overall financial sector development.

The book includes the following chapters after the introduction:

  1. From Agricultural Credit to Rural Finance: In Search of a New Paradigm
  2. Rural Finance in Azerbaijan
  3. Rural Finance in Kazakhstan
  4. Rural Finance in the Kyrgyz Republic
  5. Rural Finance in Mongolia
  6. Rural Finance in Tajikistan
  7. Rural Finance in Uzbekistan
  8. Moving Toward Inclusive Rural Financial Markets in Central Asia

Drawing from the evidence of the case studies the book finds its central conclusion that the challenge in developing inclusive financial markets in Central Asian Republics goes well beyond simply providing microfinance services in rural areas. In particular this chapter points to a number of issues that it deems deserves special importance and further elaboration. These include:

  • Role of Government
  • Population density
  • Land distribution patterns
  • Role of Government-owned banks in rural finance
  • Role of Nonbank financial institutions
  • Role of savings and credit unions
  • Deposit mobilisation and deposit insurance
  • Informal finance and rural financial markets
  • The importance of business culture
  • Role of foreign investment
  • The limits of microfinance
  • Addressing the needs of rural SMEs
  • What about equity capital?

Document Information

Document Type Book
Author Lamberte, M, Vogel, RC, Moyes, RT and Fernando, NA
Year of Publication 2006
Publisher Asian Development Bank
Number of Pages 251 pp.
Region / Country Global, Asia, Central Asia /
Primary Language English (en)
Keywords Rural Finance, Agricultural Microfinance, Financial Services
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