USAID DEC
Costa Rica, policy tools for rural finance : study of the bill to reform the FODEA Law, FODEA II
Sign inACADEMY OF CENTRAL AMERICA
Costa Rica, policy tools for rural finance : study of the bill to reform the FODEA Law, FODEA II
A bill to amend the section of the Ley de Fomentyo a la Produccion Agropecuaria (FODEA) Law that regulates the rescheduling of loans was introduced in the Costa Rican Congress in July 1988 (FODEA II).
Mesalles, Luis · 1989
Sign in to readA free account is required to download.
Abstract
The main reforms featured in the bill are outlined in this paper. It also analyzes the effects that the bill may have on the Costa Rican National Banking System and on the nation"s farmers, based on an evaluation of the consequences of FODEA I. The analysis reveals that the FODEA portfolio has been highly concentrated among a small number of farmers, particularly livestock producers of the Guanacaste region. Because of the low interest rates charged on the rescheduled loans, the subsidy granted to agricultural borrowers by the FODEA Law has also become highly concentrated. If implemented, the FODEA II bill would not only increase this concentration of the FODEA portfolio, but it may exacerbate the revenue and liquidity losses that the banks have already experienced as a consequence of the FODEA Law. (Author abstract)
Connected topics
