Informal Finance and Rural Poverty: A Study of Small Farmers' Credit

Issue on microfinance has been become focus of attention by policy makers, as a tool to alleviate poverty,through providing small loan for the poor. However, most attention in microfinance has been paid to the formal credit systems, while attention to informal credit systems is very limited. In fact, there are wide ranges of this kind of financial system available, and have not been developed properly. Knowledge about informal finance, which are not linked with the formal banking sector,is very limited. There is also insufficient research about how microfinance is adapted to the credit and savings needs and behavior of the poor at the grassroots level.This book provides information on the dynamics of small farmers’informal credit and savings activities in rural areas of West Sumatra province, Indonesia. This takes the debate on rural financial development beyond the concept of microfinance. Considering the high poverty level of small farmers in rural areas of most of developing countries, which is exacerbated by insufficient government policy intervention, this book is important as one of references for policy makers or researchers who deal with rural poverty alleviation programme.