Rural savings mobilization

The project, to be implemented primarily by the Central Bank, focuses on pilot DM efforts and research on rural financial markets (RFM"s). Pilot DM campaigns will be conducted by four branches of the Agricultural Bank (BAGRICOLA) - for the first time - and by four FEDOCOOP credit unions. Attractive interest rates will be offered, publicity campaigns conducted, and incentives provided to savers and institution employees. TA in financial and liquidity management, portfolio composition, accounting practices, and collection methods will be provided to banks by Ohio State University (OSU) and to credit unions by PCV"s, who will also provide needed training. If successful, DM efforts may be extended to other financial institutions. The Central Bank will spearhead a series of indepth studies to help establish a permanent national research capability on RFM"s. The bank itself will study the behavior of depositors and nondepositors, formal and informal RFM"s, and RFM price policies. The Superior Agricultural Institute and the Center for Administration of Rural Development will prepare case studies on: loan delinquency and recovery; liquidity management; DM practices in RFM"s; rotating credit societies; and agricultural financial and opportunity costs. Catholic University, Santiago will study: informal and formal RFM"s (including client attitudes) in four areas; community organizations that can promote participation in the latter; and rural financial intermediaries. BAGRICOLA will analyze results and transaction costs of the DM campaign and analyze a sample of client loans. The project will also fund analysis of two farm credit studies by the Agricultural Secretariat. OSU will coordinate and assist in the above efforts and undertake research comparing the Dominican Republic with other countries. Project results will be disseminated to public and private decisionmakers via seminars, workshops, or publications and an action report with specific policy recommendations will be published. Amendment of 8/14/85 extends the project to 12/31/86. DM will be carried beyond the pilot stage, and emphasis will shift from research to dissemination and training. Specific objectives will be to improve financial management by BAGRICOLA and by credit unions, to assist FUNDEJUR (Foundation for Rural Youth) in initiating DM activities, to explore the feasibility of developing other private sector intermediaries, and to promote policy reforms aimed at financial progress in rural areas. (PD-AAS-076)