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A sustainable financing strategy for SMEs should aim to enhance a low-cost collateral-free supply of loans to SMEs with good track records of repayments to banks. In this paper, we suggest two alternative financing models for SMEs that address certain borrowing constraints of SMEs. First, the model incorporates institutional mechanisms involving the government, banks, and SMEs. The strategy employs a two-pronged approach: (i) the government enhances the supply of loanable funds to banks, and (ii) identifies good SME borrowers through skills development programs and introduces them to banks. This model will reduce default risk and allow banks to offer lower-interest and collateral-free credit to SMEs, thereby improving their access to finance and performance. Second, the model could be extended to accommodate digital finance using a data-driven credit risk score of the borrowers to reduce banks’ default risks and transaction costs with or without government funds. The proposed model could resolve the moral hazard and selection bias problems. Our proposed models are based on a public-private partnership approach and therefore could solve certain borrowing constraints of SMEs. Our empirical results support the model outcomes and therefore are consistent with the predictions of our theoretical models.

This book's prime audience is government policy-makers. It provides a policy framework for governments to increase micro, small and medium enterprises' access to financial services?one which is based on empirical evidence from around the world. Financial sector policies in many developing countries often work against the ability of commercial financial institutions to serve this market segment, albeit, often unintentionally. The framework guides governments on how to best focus scarce resources on three things: ? developing an inclusive financial sector policy; ? building healthy financial institutions; and ? investing in information infrastructure such as credit bureaus and accounting standards. The book provides examples and case studies of how such a strategy has helped to build more inclusive financial institutions and systems in many countries.

This book rental housing lessons from international experience and policies for emerging market is an effort to bring rental housing to the forefront of the housing agenda of countries around the world and to provide general guidance for policy makers whose actions can have an effect on where and how people live. It warns of the challenges they face and provides guidelines on how to develop or redevelop a sound rental sector. it can enable key players in housing markets be they government officials, private rental property owners, financiers, or nongovernmental organizations to add rental housing as a critical housing option and to have an informed discussion on how best to stimulate this sector. The housing policy of most nations focused on increasing home ownership. There had been very little discussion about rental housing, less about social housing, and virtually none about public housing. This book includes totally five chapters: chapter one is introduction; chapter two is the rental market and its players; chapter three is legal, tax, and financial issues; chapter four is recommendations and conclusion; chapter five is country experiences.

PurposeThe purpose of this paper is to examine credit usage by beginning farmers and ranchers (BFR). BFR credit usage is stratified by location (state) and by socially disadvantaged farmer and rancher (SDFR, also known as historically underserved) status. SDFR groups are defined to include women; individuals with Hispanic, Latino or Spanish Origin; individuals who identify as American Indian or Alaskan Native, Black or African American, Asian, Native Hawaiian or other Pacific Islander. Non-SDFR is defined as individuals who identify as non-Hispanic, White men.Design/methodology/approachThe US Department of Agriculture’s Census of Agriculture, Agricultural Resource Management Survey (ARMS) is linked with Farm Service Agency (FSA) loan program administrative data to estimate shares of BFR operations using FSA credit. Census data provided information on population changes in total farms and BFR operations from 2012 to 2017 which are compared by SDFR status.FindingsResults reveal differences among BFR operations active in agricultural credit markets by SDFR status and state. BFR were more common among SDFR groups as well as in regions where farms tend to be smaller, such as the Northeast, compared to a more highly agricultural upper Midwest. Among BFR, non-SDFR are more likely to utilize credit than SDFR, however, FSA appeared to be crucial in enabling BFR and especially beginning SDFR groups to access loans.Originality/valueThe results are timely and of keen interest to researchers, industry and policymakers and are expected to assist in developing and adjusting policies to effectively promote and improve BFR success in general and for beginning SDFR groups.

Farmers have difficulty in developing community forest and their derivative products because they are constrained by funds. So, The Ministry of Environment and Forestry issued a credit program to delay cutting down trees. Loans use trees as collateral for credit. The experimental site is in Kawengen Village Ungaran East Ungaran, Semarang Regency Central Java Province (7˚1021 N 110˚4814 W) at 216 m above sea level. Data is obtained from Lestari farmer grup. Lestari farmer group is a farmer organization that participates in the delayed cutting down trees credit program.The purpose of the study was to find out the implications of implementing credit program to delay cutting down trees for sustainable community forest management. The study indicated that delayed cutting loan is beneficial for farmers and forest suistainability. The result is the delay in cutting trees useful for providing longer opportunities of tree life, thus trees can be functioned ecologically and economically longer. On the other hand, if it fails to pay, there will be fragmentation of community forest land. The ecological and economic functions of trees will also be lost.

Central bank responses to COVID-19 have been extraordinary in speed, in size and in scope. Much easier monetary policy, massive liquidity provision, and targeted credit support to the real economy all played a role in stabilizing financial conditions and credit. On net, there is preliminary evidence that central bank actions have been a positive—for access to credit and for the real economy—during very trying times. But the first six months have made clear that central bank policy can only indirectly address the core economic policy challenges of the crisis, whose trajectory remains highly uncertain. The risks to the economy and financial system remain very large, and key policy questions—on the degree of fiscal policy support to the real economy, about the limits of central bank risk taking and monetization of debt, and about the wisdom of heavy reliance on central bank policies given their impact on leverage and debt levels—remain just that.

PurposeA potential farm policy concern is that if nontraditional (vendor/point-of-sale) financing represents increased risk, it may have an aggregate effect on sector-wide farm financial risk. This analysis examines the use of nontraditional lender credit among borrowers in the US Department of Agriculture (USDA)'s Farm Service Agency (FSA)'s direct farm loan programs.Design/methodology/approachData source included the USDA FSA direct operating loan program for 2011–2020. A Cox proportional hazards model was used to estimate the occurrence of default over seven-year term direct operating loans.FindingsResults indicated that point-of-sale financing has a significant and positive relationship with risk for FSA direct operating loan borrowers. The presence of intermediate point-of-sale financing (mostly from machinery and equipment vendors) is associated with an increased probability of default of 9%, and the presence of such loan balances in the amount of $50,000 or more had a higher probability of default of 21%. Short-term nontraditional financing (for example from fertilizer vendors) was found to be positively related to borrower risk of default as indicated by a 22–25% increase in the likelihood of loan default.Originality/valueThrough FSA Farm Business Plan data, the authors were able to distinguish specific vendors and their loan purpose, which advances the knowledge beyond what is currently available through survey data. Findings indicate a minor increase in borrower risk for those with intermediate-term nontraditional financing. However, borrowers with short-term nontraditional financing and having large balances or greater number of nontraditional loans had increases in risk of default by substantive amounts.

Technological change in agriculture in climate risk exposed developing countries requires for land-use intensification to feed the growing populations. The purpose of this article is to analyze the impact of participation in rural credit program on adoption of yield enhancing technology(inorganic fertilizer) using 1412 farm households surveyed in 2005/06, 2009/10, and 2014/15 cropping seasons from rural Tigrai, northern Ethiopia where smallholder farmers are financially constrained to purchase of improved agricultural technologies. The paper uses a double hurdle correlated random effect models with a control function approach to analyze the causal effect. Results show that controlling for the unobservable heterogeneity and the underlying determinants of fertilizer adoption and credit participation, for an increase of credit size by 1% from its mean, adoption rate of inorganic fertilizer has increased by 2.5% and supports the earlier hypothesis. The results imply that expanding and strengthening of rural credit program are crucial for smallholder agriculture and appeared to have a more robust impact on adoption of inorganic fertilizer.

Agriculture remains central to Kyrgyzstan’s economy, yet rural farmers continue to face deep-rooted challenges that hinder their economic progress. In the aftermath of the COVID-19 pandemic, the country’s heavy reliance on food imports—particularly from Eurasian Economic Union (EAEU) partners—exposed severe food security vulnerabilities. The sudden restriction of flour imports from Russia and Kazakhstan highlighted the country’s limited domestic production capacity. In response, the Kyrgyz government introduced a tax moratorium on agricultural land (2022–2024) and launched targeted soft loan programs through state banks such as JSC Aiyl Bank and JSC RSK Bank to improve the financial stability of farmers and stimulate productivity. This study explores how these policy measures have impacted smallholder farmers by drawing on in-depth interviews with farmers across three provinces. While tax exemptions were acknowledged, they were often seen as offering only marginal benefits. In contrast, soft credit programs provided real opportunities for investment in inputs and machinery, yet access remained difficult due to complex procedures and collateral requirements. The findings suggest that although recent reforms have contributed to reducing food imports and strengthening food security, the current structure of support programs needs refinement. Expanding outreach, simplifying loan access, and better aligning policies with farmer realities are key to achieving inclusive rural development.

Unlock the transformative power of microfinance for global poverty reduction.This insightful title explores how to build inclusive financial systems that empower the poor and drive economic growth in developing countries.Drawing on a decade of CGAP experience, it offers a comprehensive framework for expanding access to financial services for all.