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We model the role of the informal credit sector in developing countries. The informational advantage of informal lenders is portrayed as the ability to monitor borrowers. Monitoring reduces the incentive problem and allows for contracts with lower collateral. This enables informal lenders to serve both individuals who cannot post the collateral required by the formal sector and those who are able but do not want to post collateral. The model is consistent with the conventional view of the informal sector as recipient of spillover demand from the formal sector. It also shows that the informal sector may provide partial insurance as the lower collateral requirement implies greater consumption smoothing for borrowers. [ABSTRACT FROM AUTHOR]

Borrower-level data from 963 agricultural lending relationships are used to examine how several factors influence the costs and returns of extending agricultural credit. The results provide estimates of the costs and returns of agricultural lending and the extent to which these costs and returns are influenced by factors such as loan volume, lender/borrower relationship factors, and contract terms. The findings indicate that economies of size exist in agricultural credit delivery and that lenders pass most of these benefits on to borrowers through lower interest rates. In addition, the impacts of lender/borrower relationship factors were relatively small. [ABSTRACT FROM AUTHOR]

Examines changes in the mix between permanent and temporary agricultural employment in Pernambuco, Brazil. Changes in total peak season employment and wage levels; Introduction of severance pay legislation for rural labor; Reduction in farmers' incentive to employ workers on a year-round basis as a result of an increase in interest rates on rural credit in the 1980s.

During the 1960's aid agencies channelled over one billion dollars to agricultural credit systems in Latin America. This plus local funds boosted the real value of rural credit by 12 percent per year. A number of assumptions underlying past credit policy are critically examined. It is argued that currently credit shortage is not the most pressing issue. Rather, emphasis should be placed on realistic pricing of rural credit and mobilizing rural savings for credit use through interest incentives. [ABSTRACT FROM AUTHOR]

Discusses the issue of rural bank regulation in the United States. Factors affecting the performance of rural banks; Changing net regulatory burden on rural banks; Burden reduction through regulatory competition.

Evaluates the policy recommendations made in the papers of agricultural economist Peter J. Barry et al and Professor Roger W. Gray which recognize the market risks that confront agricultural producers and emphasize the institutional factors accompanying the transfer of risk from government to marketplace respectively in the U.S. Recommendation of Barry et al that there be ties between rural areas and money market centers.

Discusses the effects of economic policy on rural banks and rural communities. Application of the theory of institutional innovation to the deregulation of financial institutions; Comparison of the performance of independent banks with that of the affiliates of multi-bank holding companies in the context of rural capital markets; Importance for unit banks to maintain a high ratio of equity capital to assets.

Comments on a study by Peter Barry concerning the changes in legislation on rural credit markets and the impacts of these changes on the suppliers of agricultural credit. Financial innovations that are having an impact on rural credit markets; Impacts of the anticipated legislative changes on rural credit markets; How an increase in the variability of interest rates can best be analyzed.

Presents abstracts from selected papers that deal with rural credit and economic reform in Africa. `Gender and Variety Selection: Farmers' Assessment of Local Corn Varieties in Southern Mali,' by Toon Defoer, Abdoulaye Kamara and others; `Nonprice Determinants of Input Acquisition Behavior in Senegal,' by Valerie Kelly, Bocar Diagana and others; Credit Unions in Niger: The WOCCU Experience,' by Korotoumou Ouattara and Mayada M. Baydas.