Factors Hindering the Development of Agricultural Consumer Credit Cooperatives and Possible Solutions

Abstract

AbstractThis article considers the main factors that inhibit the development of agricultural credit consumer cooperation and proposes ways to solve them. The development of cooperation in our country has a long history. Credit and loan savings partnerships provided real financial assistance to peasants. They saved the peasants from private banks and moneylenders, since they put them in bonded dependence. In order for the system of credit cooperation to develop successfully, state structures supported it in every way. Russian cooperative structures were comprehensively used in the distribution of loans, directly preferential, and state subsidies. For Russian independent farms today, the dominant position in the form of a source of small loans is only commercial banks. Significant assistance could be provided to enterprises in the agricultural sector, namely agricultural producers, the revival of the credit cooperative system. Assistance would come in the form of finding funds for farming, and could greatly facilitate the task of applying the experience of creating agricultural credit cooperation at the end of the past and the beginning of this century in Russia. There is an insufficiency in the current development of the legal framework in the development of credit cooperation and its contradictory nature. Amendments and adjustments are required in the Federal Law “On Agricultural Cooperation,” as well as in the existing Federal Law “On the Development of Agriculture.” A review would not prevent the Federal Target Program on the Sustainable Development of Rural Settlements, which was designed for implementation until 2020, as well as the possibility of its extension. The legal framework for agricultural credit cooperatives regarding their legal status and the general principles for self-regulation in financial markets should be reviewed. Here you can add a list of those target indicators that are designed to ensure the availability of financial services at retail. Currently, no program has been developed that includes a systematic approach and a science-based concept for the development of agricultural credit cooperation in our country, as well as including state support and regulation.KeywordsCredit cooperativesAgricultural cooperativesCooperative membersConsumer cooperativesFinancial assistanceJEL CodeQ130