AGRICULTURAL CREDIT - FACTORS OF INFLUENCE AND DYNAMICS OVER TIME

Abstract

In the market economy, credit is granted by holders of money capital to other individuals and legal entities, who generally use it in an active way. Agricultural and rural credit must be developed through a special banking system or through special funds managed by commercial banks. Farmers are disadvantaged from the start in the competition for loans. Many farmers do not have the minimum knowledge to draw up an investment plan on which to apply for loan financing. Investments in agriculture are considered to have a higher risk than in other sectors: unpredictability of climate action; possible natural disasters; poor development of the insurance system in agriculture. Although the speed of capital movement in agriculture is higher than in other sectors (production cycles in most vegetable production and in part of animal production are annual or even biannual or multiannual), risk factors are assessed by banks as more important than the advantages of a high speed of capital movement.