Strengthening rural credit services

The BCA will implement the project. BCA management will be upgraded in four ways. A function/task analysis will be conducted to define central, regional, and local BCA operations, possibly leading to a BCA reorganization plan. Improved accounting, credit, and loan management procedures will be introduced, and BCA staff will be upgraded through U.S. academic training of three personnel, U.S. non-academic training of 10, and in-country training of 100 others. The physical infrastructure at each of BCA"s three levels will be improved. The BCA will expand its services in two ways: by increasing (although at a slower rate than in the past) its provision of agricultural production credit so as to allow a greater spread of capital to agricultural credit societies (SAC"s); and by expanding the range of services offered, e.g., by developing a savings mobilization program and, possibly, by increasing BCA money transfer and accounting services. The prospect of providing non-agriculutural credit will be studied. BCA"s financial strength will improved by minimizing operating deficits (e.g., by changes in interest rates and loan fees) and by maximizing operating revenues (e.g., by increasing the loan turnover rate). Finally, the BCA"s long-term planning capability will be strengthened through by assessment of the rural financial market (RFM). Proposed studies will treat, inter alia, the feasibility of merging the small farmer credit portfolio of the IDAI (Institute for Agricultural and Industrial Development) and the BCA; methods to better coordinate BCA activities with existing rural extension services; the BCA"s possible evolution into rural development banking; the economics and sociology of SCA"s and other groups; informal lending services; and economy-wide factors affecting RFM"s. Two factors could jeopardize the project - a little understood new proposal to have the BCA absorb the IDAI"s small farmer credit portfolio, and the unlikelihood that public treasury funds will be adequate to subsidize the expansion of the BCA"s small farmer farmer production program.