Publication:
Seasonality of Rural Finance

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dc.contributor.authorBadruddoza, Syed
dc.contributor.authorKhandker, Shahidur R.
dc.contributor.authorSamad, Hussain A.
dc.date.accessioned2017-03-01T22:32:48Z
dc.date.available2017-03-01T22:32:48Z
dc.date.issued2017-02
dc.description.abstractSimultaneity of borrowing, withdrawal of savings, and loan defaults due to the pronounced seasonality of agriculture often leads to investment failure of rural financial institutions. Lack of borrowing leads to lack of in-come- and consumption-smoothing, and in turn, causes inefficient resource allocation by rural households. Financial institutions that are active in rural areas take different measures to address the covariate risks in intermediation. For example, microfinance institutions have sought various measures such as supporting non-farm activities to diversify income, introducing seasonal loans, and bringing flexibility in loan repayments to reduce non-payments in lean seasons. This paper examines whether the financial inclusion policies of micro-finance institutions have successfully helped reduce the adverse effects of covariate risks. Analysis of house-hold and program level data from Bangladesh suggests that despite the innovative measures taken by the MFIs to cope with the covariate risks, seasonality of income still affects seasonality of borrowing and investment decisions of both the households and MFIs beyond and above what is caused normally by agricultural seasonality. Innovation is needed to promote, among other things, sectoral diversification of financial inter-mediation and to avert the extreme seasonality of rural income. Rural labor markets should be diversified enough to address the seasonality of income and consumption. Public policies guiding rural financial inter-mediation must reflect such realities of rural economies.en
dc.identifierhttp://documents.worldbank.org/curated/en/957611488291742296/Seasonality-of-rural-finance
dc.identifier.doi10.1596/1813-9450-7986
dc.identifier.urihttps://hdl.handle.net/10986/26184
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 7986
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectrural finance
dc.subjectseasonality
dc.subjectcrop cycles
dc.subjectlean seasons
dc.subjectmicrofinance
dc.subjectfinancial inclusion
dc.subjectinvestment decisions
dc.subjectrisk
dc.subjectfinancial intermediation
dc.titleSeasonality of Rural Financeen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleSeasonality of Rural Finance
okr.date.disclosure2017-02-28
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/957611488291742296/Seasonality-of-rural-finance
okr.guid957611488291742296
okr.identifier.doi10.1596/1813-9450-7986
okr.identifier.externaldocumentum090224b08498cc66_1_0
okr.identifier.internaldocumentum27231471
okr.identifier.reportWPS7986
okr.importedtrue
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/957611488291742296/pdf/WPS7986.pdfen
okr.region.administrativeSouth Asia
okr.region.countryBangladesh
okr.statistics.combined1654
okr.statistics.dr957611488291742296
okr.statistics.drstats1209
okr.topicAgriculture::Agricultural Sector Economics
okr.topicFinance and Financial Sector Development::Financial Intermediation
okr.topicFinance and Financial Sector Development::Microfinance
okr.topicFinance and Financial Sector Development::Rural Finance
okr.topicRural Development::Rural Microfinance and SMEs
okr.unitPoverty and Inequality Team, Development Research Group
relation.isAuthorOfPublication1dc630c1-c19d-5c71-8d7c-1299435d0456
relation.isAuthorOfPublicationb91822c4-75b2-5ebb-a3d8-2fb46660d3b9
relation.isAuthorOfPublication.latestForDiscovery1dc630c1-c19d-5c71-8d7c-1299435d0456
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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