The role of government in developing agricultural finance: A look at the history of Germany, the US, and South Korea

Published on

June 10, 2014

The fourth briefing note in a series from the Initiative for Smallholder Finance reflects on the role of capital markets within the context of historical agricultural sector development.

Governments often directly shape the development of agricultural finance systems as they evolve. This research uses historical evidence from three advanced economies – Germany, the United States, and South Korea – to highlight policy considerations that will affect the growth of agricultural finance in today’s developing markets, where many of the world’s 450 million smallholder farmers live.

While there is no one-size-fits-all approach to agricultural finance policymaking, this analysis shows that systems have most effectively met agricultural sectors’ needs when governments carefully designed policies to enhance rather than replace credit provided to farmers by private actors.

 

About the Author(s)

Initiative for Smallholder Finance
Learning Lab Strategic Partner

ISF is an advisory group committed to transforming rural economies by delivering partnerships and investment structures that promote financial inclusion for rural enterprises and smallholder farmers. Combining industry-leading research with hands-on technical expertise, ISF develops practical, profitable, and sustainable financial solutions.

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