Preferences for Rural Credit Systems in Georgia

In the Georgian agricultural sector, the main development constraints are insufficient access to rural credit institutions, the absence of marketing chains for agricultural products and limited application of advanced farming technologies. This dissertation addresses these constrains by investigating ways of improving the credit supply for Georgian farmers. For this purpose a representative survey containing a choice experiment was conducted in winter 2007/2008 in the region of Shida Kartli. Results show that farmers expressed a very high demand for small credits with individual liability, and one-third of them have experience with loans. These findings provide useful information for the implementation of future credit unions. The advantage of credit unions lies in their member-based, democratic governance structure (one member-one vote), which leads to greater independence from other financial institutions. However, credit unions and other cooperatives are not widespread in Georgia. To advance the implementation of credit unions in Georgia business models for credit unions are presented.