University of National and World Economy, Agribusiness Department, BG-1404 Sofia, Bulgaria
MITEVA, A., 2005. Status and problems of development of agricultural financing in Bulgaria. Bulg. J. Agric. Sci., 11: 79-86
In the paper a special attention is paid to the different financial institutions specialized in agricultural lending -State Fund Agriculture and Tobacco Fund, SAPARD, the Association of Credit Cooperatives, the system for warehouse receipts, partly JOBS. Commercial banks started looking attentively at the sector only recently by introducing new products by being more flexible with collateral. Unfortunately most of the financial institutions lack sector knowledge, have restrictive collateral requirements, are afraid from the seasonality and long gestation periods in agriculture which prevent from receiving regular income. Moreover the low density of rural population increase the transaction costs which couple together with the slow and imperfect legal system hamper the development of agricultural financing.
In the paper are disclosed the issues that in order to overcome these difficulties there is the issue of building a financial infrastructure to those living in rural areas. Accessibility has both the obvious geographical, and the less obvious aspects which concern products lines, operational procedures and orientation of owners, management and loan officers (maintain slow, low cost application procedures with rapid loan-decisions, maintain flexible attitude towards collateral and scheduling of repayments, etc.). More than this, despite an apparent uniformity in the rural population, there are very marked differences in peoples' circumstances, aspiration and command of resources. There is a need for this variety to be matched with variety of lending products serving the sector.