Rural Finance in Transition Countries: The Russian Federation

The present study provides a comprehensive picture of rural finance in the Russian Federation after more than ten years of transition. After describing the context and methodology of the study, some information about the recent economic development of Russia - with a focus on the rural economy - is given. The transformation process in rural areas is analysed in detail, in particular the Saratov Oblast region and the Yaroslavl Oblast region. This includes aspects of the transition from a centrally-planned to a more market-oriented agricultural structure, which resulted in increased rural unemployment and poverty due to the collapse of collective farms.

In addition, the study examines the performance of the existing financial infrastructure in rural areas, and the new types of rural financial institutions established since the mid-1990s. Within this context, the rural banking sector, commodity credits, leasing, informal lenders and credit unions are analysed. Activities of principle donor organisations are also briefly described.

Finally, some conclusions are drawn, which include recommendations on the policy level, for the legal framework, and for rural financial institutions and SMEs.