Functions and Role of Institutional Finance for Agricultural and Rural Development

This paper demonstrates that institutional finance must play a multi-functional role to fulfil its three-fold objectives of promoting (a) growth, (b) better equity, and (c) its own viability/profitability for agricultural and rural sector. It is further argued that sound and relevant institutional finance of this nature does not necessarily create major conflict in achieving these objectives. Both of these are elucidated in what follows by organizing the paper into three sections, namely, rationale for (section II), functions of (section III), and role of institutional finance (section IV). Final section briefly outlines policy support required for promoting multi-functional role.