Insufficient access to rural credit institutions, the absence of marketing
chains for agricultural products and limited application of advanced farming
technology are the main development constraints in the Georgian
agricultural sector. To research farmers’ demand for rural financial services
a representative household survey was conducted early 2008 in the region of
Shida Kartli (N=406). The survey included a choice experiment to
investigate farmer’s preferences for characteristics of particular credit
schemes. Results show that segments of the farmer population differ in their
preferences for loan attributes. Furthermore, 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 future
credit cooperatives. Barriers to implementation are lack of trust among
farmers and misconception of cooperatives with the former Soviet
kolkhozes. Information campaigns can therefore be a key ingredient for the
successful establishment of credit cooperatives.