Financial Exclusion of Farmers and Rural Entrepreneurs

Abstract

Financial exclusion appears to be greater in rural areas than in cities. The article concludes that the problem is connected not only with the people of low incomes but also individuals running their own businesses e.g. farmers and small entrepreneurs. The extent and reasons for fi nancial exclusion among such entities have been identifi ed and accompanied by the analysis of access to banking services -the key to effective management. The source of empirical data relied on survey questionnaires of farmers and small entrepreneurs in the rural areas in the south-eastern region of Poland. It was stated that in case of persons running their own businesses fi nancial exclusions is mainly connected with a limited access to bank credit, yet the reasons for this situation are diverse. Apart from the internal factors associated with businesses (e.g. low and unstable incomes, aversion to risk, lack of confi dence in banks etc.), signifi cant determinants lie on the side of banks and the structure of fi nancial system in rural areas.

Selected Economic Determinants of Labor Profitability in Family Farms in Poland in Relation to Economic Size

“…There is a need for specialized machinery and equipment, creating demand for long-term capital and leading to a high volatility of cash flows and economic results. For this reason, it is an important signal for the agricultural policy, indicating the need to mitigate the consequences of credit restrictions in agriculture [142][143][144][145].…”

Problematyka związków przedsiębiorcy wiejskiego z miejscem w badaniach przedsiębiorczości wiejskiej

“…Warto dodać, że w tej perspektywie badacze chętniej prowadzą badania na poziomie pojedynczych wsi oraz pojedynczych firm i odwołują się do metod jakościowych (społecznych), np. wywiadów, w tym pogłębionych, kwestionariuszowych oraz studiów przypadku (Falkowski, Kluba, 2004, Kata, Walenia, 2015Jęczmyk, Maćkowiak, 2016;Halamska, 2016). Stawia się tu jednak głównie na poznanie ekonomicznych i społecznych mechanizmów powstawania i funkcjonowania firm, m.in.…”

What determines the capital structure of farms? Empirical evidence from Poland

“…Kata and Walenia's (2015) in-depth empirical study highlights that financial exclusion, particularly credit exclusion, specifically affects farmers and rural entrepreneurs: nearly 60% of surveyed farmers did not have access to credit, while 64% did not use credit for financing current farm activity and development. This exclusion results from endogenous and institutional credit restrictions and rationing as well as an individual conservative mentality towards credit and an aversion to financial risk (Kata & Walenia, 2015;Soliwoda, 2015).…”