Rural Finance in Transition Countries: The Czech Republic

Studying the transformation process of the financial sector in rural areas of the Czech Republic
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This study approaches the issue of rural finance in the Czech Republic by examining three fields. Firstly, it briefly describes the rural economy, its development, infrastructure and its current drawbacks. Secondly, it analyses the agricultural sector and the non-agricultural SME sector as potential sources of demand for banking services in rural areas. Thirdly, it outlines the development and structure of the financial sector and the financial products and services available. This section also examines the distinct development between formerly state-owned banks and newly-founded financial institutions.

The study attempts to answer the following key questions:

  • What is the stage of development of rural areas in the transformation process?
  • Which formerly state-run financial institutions have survived, and what is their current potential?
  • What new approaches have been developed in rural finance, and what are their strengths and limitations?
  • What gaps remain in the existing range of financial services, and how might they be filled?

Recommendations for improving rural financial services include adopting a cross-sectoral approach to promoting and financing the rural economy, identifying potential target groups and their financial needs, and addressing structural constraints to developing rural financial markets.

About this Publication

By Breitschopf, B.