2.3. Credit
Little is known about credit in Liberian agriculture. The
Development Bank offers credit to commercial farmers at 10
per cent interest. It uses the Rubber Planters Association
as its technical agent for an appraisal of all loan applications
and requires bank security so that this credit is reserved
to "gentlemen farmers". Commercial banks play a
very minor role in providing credit to agriculture.
There are no organized credit facilities for peasant farmers.
When they need money, they rely on three sources:
- Chiefs may loan money or goods and, thus, increase their
authority. In most cases, such credit is granted without
interest, but it is customary to offer a "gift"
at the time of repayment. The amount of hidden interest
in the form of unpaid labour is unknown.
- The extended family system requires each person to share
his means with his relatives. Thus, wage earners often have
to give considerable amounts of their earnings to members
of their family. This is not considered as real credit.
There is an understanding that the other has to reciprocate
if he is in a position to do so. Taxes and school fees are
paid, to quite an extent, in that way.
-
Lebanese treaders represent an important source of
cash needs, usually as advance on future sales of products.
Little is known concerning interest rates, influence on
prices paid for products, type and quantity of consumer
goods purchased and the total amount of such credits.
- Some tribes have a kind of savings cooperative. All members
pay a small amount, and the sum is given to one person at
a time,
Programmes of agricultural development have to take into
account that institutions to cater for credit needs in the
development process have yet to be built.
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