Publication: Turkey : Rural Finance Study, Volume 2. Expanded Report
Date
2006-05
ISSN
Published
2006-05
Author(s)
World Bank
Abstract
Over the past five years in Turkey, the
agricultural and rural sector has seen substantial change in
transfer policies which now place greater emphasis on
improved equity and investment. These have been summarized
in the earlier World Bank "Review of the Impact of the
Reform of Agricultural Sector Subsidization (2004), and
"Policy and Investment Priorities for Agricultural and
Rural Development" (2005). Currently, the structural
changes in the agricultural sector and rural employment
generation in response to labor shedding in the agricultural
sector are key challenges to which Turkey is responding in
the design of and agricultural and rural development
strategy. However, the impact of government transfers and
public investment policies in the rural sector will be
limited unless the supply of, access to, and demand for
rural financial services is significantly increased. For
these reasons, the Turkey Rural Finance study (RFS) seeks to
establish a policy agenda for the Government of Turkey (GOT)
in order to contribute to the effort of renewed growth of
the rural financial system after a period of prolonged
decline. In order to inform this policy agenda, the study
also has aimed at portraying the situation of rural
financial markets in Turkey and determining the factors
influencing the use of financial services by rural
households and the constraints affecting the availability of
financial services in rural areas. The findings and
measures recommended by this study are also important for
Turkey's on-going rural sector dialogue with the
European Commission (EC), as increased access of small rural
enterprises to financial services is desired for improved
absorption by these enterprises of EC funding under the
Instrument for Pre-Accession programs in rural areas. The
findings of the RFS, based on two surveys of rural
households and financial intermediaries carried out in 2004
and on other financial data compiled in 2005, reveal that
rural financial markets perform relatively poorly, leading
to low incidences in the use of financial services by rural
households and therefore limiting their ability to take
advantage of growth opportunities and/or accumulation of
assets. For example while the agricultural sector accounts
for roughly 10-15 percent of GDP, it receives only 5 percent
of all bank loans. Based on the survey of rural households,
over 70 percent of rural households were found to be credit
constrained, and only 9 percent of surveyed rural households
reported making investment outlays in 2004.
Citation
“World Bank. 2006. Turkey : Rural Finance Study, Volume 2. Expanded Report. © Washington, DC. http://openknowledge.worldbank.org/entities/publication/748a28ac-6c7b-55a8-a6a9-f3f79044223e License: CC BY 3.0 IGO.”