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The role of credit cooperatives in rural development case study, Mazandaran province, Iran.


It has long been recognized that social engagement is critical to motivating and improving the economic and social well-being of communities [18].

Development of agriculture and the improvement of peasant's standard are restricted by the financial problems in Iran. The capacity of the cooperative movement cooperative movement, series of organized activities that began in the 19th cent. in Great Britain and later spread to most countries of the world, whereby people organize themselves around a common goal, usually economic.  for creating viable and sustainable enterprises secures productive employment and self-employment, and generates income and the payment of decent wages and salaries. Financial cooperatives provide the means for escaping from indebtedness and for effective financial management. Their provision of insurance and services for health and social care, as well as affordable and appropriate housing, and their contribution to food security are clearly major contributions to the alleviation of poverty not matter what definition you wish to apply (Chavez, 2003).

When discussing the potential of cooperatives to promote rural development through community development, income generation, empowerment of women and men and organizing people to enable them to participate in the development process, it is clear that cooperatives can and do make substantial contributions.

In recent years, an overwhelming emphasis on "access" has implied that governments and donor groups seek ways to extend (and reform) existing financial structures so that they may reach those whom have never enjoyed formal financial services The examples and perspective in this article or section may not represent a worldwide view of the subject.
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 before. Rural Credit Cooperatives (RCCs) have been identified as a key vehicle for the delivery of financial services to the small-scale entrepreneur/consumer.

As it was noticed, a major change in the credit system following the 1979 revolution was the abandonment of interest based credit in favor of interest-free and profit and loss sharing loans

The word "micro credit" did not exist before the seventies. Now it has become a buzz-word among the development practitioners. In the process, the word has been imputed Attributed vicariously.

In the legal sense, the term imputed is used to describe an action, fact, or quality, the knowledge of which is charged to an individual based upon the actions of another for whom the individual is responsible rather than on the individual's
 to mean everything to everybody. No one now gets shocked if somebody uses the term "micro credit" to mean agricultural credit, or rural credit, or cooperative credit, or consumer credit, credit from the savings and loan savings and loan n. a banking and lending institution, chartered either by a state or the Federal government. Savings and loans only make loans secured by real property from deposits, upon which they pay interest slightly higher than that paid by most banks.  associations, or from credit unions, or from money lenders. When someone claims micro credit has a thousand year history, or a hundred year history, nobody finds it as an exciting piece of historical information.

In the 1970s, experimental programs in Bangladesh, Brazil, and a few other countries extended very small loans to groups of poor women for investment in micro business. This type of micro enterprise credit was based on solidarity group lending in which every member of a group guaranteed the repayment of all members. The success of these programs further exposed the failure of early credit schemes which were provided as components of donor--supported area based development projects. In this field pioneering work by the Grameen Bank in Bangladesh, the Bangladesh Rural Advancement Committee (BRAC Brač (bräch), Ital. Brazza, island (1991 pop. 13,824), 152 sq mi (394 sq km), off the Dalmatian coast in the Adriatic Sea, Croatia. It is a popular summer resort and tourist spot. Supetar (Ital. ) and FINCA --style village banking in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies.  were instrumental in creating space for micro-credit to be treated as a sub--system in its own right within the overall financial sector of many countries.

Through the 1980s and 1990s, micro-credit programs throughout the world improved upon the original methodologies and challenged conventional wisdom about financing the poor. First, it showed that poor people, especially women, had excellent repayment rates among the better programs rates that were better than formal financial sectors of most developing countries. Second, the poor were willing and able to pay interest rates that allowed micro-credit institution to start covering their costs.

Rural financial systems in many developing economies benefited also from a general decline of government interventions and lower market entry barriers for financial institutions. Especially saving and credit cooperatives and non-governmental organizations (NGOs), previously held back by often severe restrictions, can now more easily the field of rural financial intermediation.

Rural cooperative:

Development is one of the main goals that all communities try to achieve in order to improve the living standards living standards nplnivel msg de vida

living standards living nplniveau m de vie

living standards living npl
 for individuals in those communities [16]. Rural cooperatives have played an important role in rural development through development of agriculture.

Rural cooperatives are generally considered as a tool for rural development. Many developed countries such an England, France, German and United Stated largely depend on incomes earned through rural cooperatives [2].

The rural cooperatives are considered to be the most important organizations that pay attention and try to support the rural development in general and the agricultural development in special through the activities and services achieved for the sake of farmers [16].

Since the establishment of the first cooperative in 150 years ago, there has been a tremendous growth in developing cooperatives throughout the world. Based on the latest statistics, approximately 800 million people are members of cooperatives in over 100 countries [8].

More awareness and knowledge about the cooperative form of enterprise, as an option to conduct business, is widely needed by the people most likely to benefit from it [17].

Cooperatives can accelerate the process of development and participation of rural population in their activities. In many countries, agricultural cooperatives prove to be an important model of enterprise by which small farmers can organize and optimize limited resources to increase their income [24].

Agriculture is vital for rural economic development and an important source of business for rural financial institutions. Capital formation is generally recognized as a necessary condition of development. Efficient financial markets play a key role in capital formation [14,21]

With rural poverty accounting for 63 percent of poverty worldwide, the importance of making microfinance services available beyond city limits is clear. The rural poor constitute both the greatest unmet need and largest unserved market for microfinance services. Providing financial services to the rural poor can address problems associated with high levels of poverty, low levels of production, and rural-urban migration Rural-urban migration is the moving of people from rural areas into cities. When cities grow rapidly, as in Chicago in the late 19th century or Shanghai a century later, the movement of people from rural communities into cities is considered to be the main cause. . The objectives in rural microfinance are to extend the frontier of sustainable microfinance beyond urban areas by overcoming cost barriers, mitigating risk, and exploring technological and methodological innovations.

On the other hand, government efforts of targeting the poor through subsidized sub·si·dize  
tr.v. sub·si·dized, sub·si·diz·ing, sub·si·diz·es
1. To assist or support with a subsidy.

2. To secure the assistance of by granting a subsidy.
 credit have not been successful in the past. Firstly, the cheap credit has leaked to the relatively richer rural households. Secondly, the subsidy dependence of these institutions required regular injection of government and donor funds and these institutions could not become sustainable. Thirdly and most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent"
above all, most especially
, only a fraction of the credit could flow to the women poor who are the most deprived of the poor. Hence these institutions have not been successful both in terms of outreach and sustainability.

The demand for credit in rural areas arises from agricultural investment, consumption smoothing by households, and non farm investment. These components are reflected in the demand for credit to the extent that these requirements cannot be financed from farm savings. Farm savings consists of self financed investments, bank deposits, and cash holdings. But the credit situation faces several serious problems. First, the existing institutions delivering formal credit are facing a serious financial crisis and cannot be sustained. Second, as discussed earlier, the present rural finance system does not cover adequately the smallholders, who will be very important for future growth. Third, an increase in the growth rate of agriculture will increase the demand for credit.

But while more rapid growth in agriculture raises the demand for credit, it will also raise incomes and thus the ability to self-finance. Even with this increase in own resources, the total demand is expected to be greater. Furthermore, capital-intensive strategies to enhance agricultural productivity Agricultural productivity is measured as the ratio of agricultural inputs to agricultural outputs. While individual products are usually measured by weight, their varying densities make measuring overall agricultural output difficult.  will create additional demand for credit.

The world rural economy has changed considerably over the last couple of decades. Many countries are going through economic transitions that are changing the rural landscape and the opportunities for investment and development. In recent years, the extensive losses of rural financial institutions and farmers' increasing difficulties in getting loans have inspired people to reflect on the following questions. What are the real effects of government-subsidized microfinance loans provided by rural credit cooperatives (RCCs) and the poverty alleviation loans? What is the coverage of RCCs microfinance loans? Have such loans met the demands for credit of rural households? What is really needed in rural finance, an ample supply of funds or a good funding mechanism? Can the rural financial system meet the demands of rural economy in transition? Is the current supervisory framework for RCCs effective?

According to according to
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

 modern economists, the success of credit cooperatives results from two features of cooperatives: they can capitalize on Cap´i`tal`ize on`   

v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>.
 superior information about borrowers and they can impose inexpensive but effective sanctions on defaulting borrowers. These characteristics permit cooperatives to lend to individuals that conventional banks would not want as customers and to tailor loan terms more closely to borrower's needs [9].

Rural Credit Sources in Iran:

In Iran, various formal and informal organizations and institutions, including the Iranian agricultural bank, commercial banks, rural cooperative organizations and agricultural supporting funds are engaged with credit provision of agricultural sector. The agricultural bank is the main supplier of micro-credits to poor in the rural areas. Micro-credit in Iran began in 2002, in two small villages participating in a pilot poverty empowerment scheme. It worked by organizing low-income communities into self-help groups that are blossoming into rural cooperatives and micro-credit agencies. The program is based on the UN's Millennium Development Goals “MDG” redirects here. For other uses, see MDG (disambiguation).

The Millennium Development Goals are eight goals that 192 United Nations member states have agreed to try to achieve by the year 2015.
 that aims to boost rural livelihoods, among other things. The government recognized the accomplishments of the pilot program and decided to help replicate the program in several other provinces and hopes to adopt it on a national level [3].

Agricultural credit plays an important role in agricultural development. Agricultural household models suggest that farm credit is not only necessitated by the limitations of self-finance, but also by uncertainty pertaining per·tain  
intr.v. per·tained, per·tain·ing, per·tains
1. To have reference; relate: evidence that pertains to the accident.

 to the level of output and the time lag between inputs and output [5]. Recent studies show the growth rate of investment in agriculture is less than other economic sector. Agricultural financing is one of the most important factors to develop rural areas in developing countries. Payment of bank credit is a way of financing. In fact, facilitation Facilitation

The process of providing a market for a security. Normally, this refers to bids and offers made for large blocks of securities, such as those traded by institutions.
 of access to credit can raise amount of productive investment. Credit has a crucial role for elimination of farmers' financial constraints to invest in farm activities, increasing productivity and improving technologies. Generally, credit accessibility is important for improvement of quality and quantity of farm products so, that it can increase farmers' income and avoid from rural migration. On the other hand, some policy makers believe that payment of credit with low interest rate to farmers can support them against some results of development policies that threat their welfare [11].

Like many developing countries, small enterprises and farmers in Iran suffer from a lack of access to capital. It is difficult for them to get credit from banks. The economic and agriculture diversity in the different regions of Iran require local and specialized insight into the unique problems attached to the different farming systems; livestock/poultry weight gain and cost of production standards; horticulture horticulture [Lat. hortus=garden], science and art of gardening and of cultivating fruits, vegetables, flowers, and ornamental plants. Horticulture generally refers to small-scale gardening, and agriculture to the growing of field crops, usually on a large  and field crop yield requirements; and above all, marketing and farm prices fluctuation Fluctuation

A price or interest rate change.

Rural credit in Iran comes from two sources--formal and informal. The main sources of formal credit are the Agricultural Bank Limited, the Commercial Banks and domestic private banks. The formal lending institutions are regulated by the Central Bank of Iran that provides counter finance to the Agricultural Bank of Iran and other banks. The informal sector is highly heterogeneous in terms of the relationship between borrowers and lenders and can be grouped into many types. Friends and relatives as a group provide the bulk of credit in rural areas (others include landlords, shopkeepers, merchants, forward buyers). Informal lenders have limited loan portfolios and operate within narrow areas of influence. These formal and informal sources provide credit services that differ from each other in terms of duration and amount of loan, its use, interest rate and transaction costs.

Cooperative Sector in Iran:

A look at the history of the presence of organizations and institutions in the villages of Iran shows that cooperatives have been one of the most old-established institutions since the beginning of planning in Iran, having a direct impact on the social, economic and cultural activities of the villagers [22]. History of this presence in Iranian villages refers back to the implementation of land reform in 1960.

The first Iranian cooperatives began their work in 1974, mainly in villages. The aim of establishing these cooperatives, which used to benefit from governmental supports, was to improve the welfare of post-land-reform farmers. After Islamic revolution, social justice was announced as being the first priority.

According to the Article 44 of the Iranian Constitution, the economy of Iran The economy of Iran is a transition economy where a continuing strong labour force growth unmatched by commensurate real economic growth is driving up unemployment to a level considerably higher than the official estimate of 11%.  is to consist of three sectors: state, cooperative, and private; and is to be based on systematic and sound planning.

* The state sector is to include all large-scale industries, foreign trade, major minerals, banking, insurance, power generation, dams and large-scale irrigation irrigation, in agriculture, artificial watering of the land. Although used chiefly in regions with annual rainfall of less than 20 in. (51 cm), it is also used in wetter areas to grow certain crops, e.g., rice.  networks, radio and television, post, telegraph and telephone services, aviation, shipping, roads, railroads and the like; all these will be publicly owned Publicly owned can refer to:
  • Public company, a company which is permitted to offer its securities (stock, bonds, etc.) for sale to the general public, typically through a stock exchange
  • Public ownership, of government-owned corporations
 and administered by the State.

* The cooperative sector is to include cooperative companies and enterprises concerned with production and distribution, in urban and rural areas, in accordance with Islamic criteria.

* The private sector consists of those activities concerned with construction, agriculture, animal husbandry animal husbandry, aspect of agriculture concerned with the care and breeding of domestic animals such as cattle, goats, sheep, hogs, and horses. Domestication of wild animal species was a crucial achievement in the prehistoric transition of human civilization from , industry, trade, and services that supplement the economic activities of the state and cooperative sectors.

A strict interpretation of the above has never been enforced in the Islamic Republic An Islamic republic, in its modern context, has come to mean several different things, some contradictory to others. Theoretically, to many religious leaders, it is a state under a particular theocratic form of government advocated by some Muslim religious leaders in the Middle  and the private sector has been able to play a much larger role than is outlined in the Constitution. In recent years, the role of the private sector has been further on the increase. Furthermore, an amendment of the article in 2004 has allowed 80 percent of state assets to be privatized (Note C, article 44 of Constitution).

According to Article 44 of Islamic Constitution, cooperatives were and are the second most important economic sector of the country (next to public sector). Private sector is ranked as the third one. It seems that the major aim of supporting cooperative sector was limiting the process of wealth accumulation in the hands of a small group, but not by creating a dominant public sector. So Cooperatives seemed to be the third way between capitalism and socialism [12].

The main difference between cooperatives and the state sector is that the cooperatives use a more democratic system of governance in which there is no employer employee relationship. Cooperatives are widely active in the market, where there always exist competition and investment risks. The cooperative sector in Iran covers all kinds of socio-economic activities. The sector's activities are mainly aimed to boost production and export of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. .

Rural Cooperative Societies in Iran:

In Iran 22.23 million people living in 65000 villages who directly or indirectly depend on agriculture to survive, while most of them are living under poverty line. Still Iranian rural economy is dominated by agricultural sector which accounts for 27% of GDP GDP (guanosine diphosphate): see guanine. , 22.9% of employment opportunities, 82% of food supply and 35% of non-oil exports, plus considerable raw materials for industrial use. These figures show that rural economy has an important role in national economy. To establish a sustainable economy in rural areas, almost every village needs credit, clean seeds, infrastructure and guidance in crops and livestock production. They also need farm machinery, marketing facilities, cooperatives, water supplies, education and diverse economic activities [13].

The history of Iran
See Also: Persian Empire
History of Iran and Greater Iran (also referred to as the "Iranian Cultural Continent" by the Encyclopedia Iranica)—- consisting areas from Euphrates in the west to Indus River and Jaxartes in the east and from
 shows that the first cooperative law in Iran was enacted in 1925, which was amended in 1948, in 1952, and then in June 1971.

The rural cooperatives were created as apart of the Land Reform program, but they started to operate before the Land Reform implementation. These cooperatives were transformed into fully governmental organizations in other to take over the duties of landlords and Bunehs [19].

Rural cooperative societies were in practice the most accessible source of institutional credit available to peasants. These cooperative were supported to cover all the land reform beneficiaries. The number of cooperatives, however, increased slowly. There had been 8361 cooperatives serving about 30000 villages by the end of 1972. Some of these cooperatives existed only on paper and about half of the villages can be said not to have had cooperative societies. In 1972, it was decided to consolidate the societies and consequently their number decreased to 2717 in 1973. As a result, the members of 6000 dissolved cooperatives had to rely on the bigger cooperatives which were located in large villages. In some cases, for example, peasants in twenty different villages were members of one and the same society [10]. Considering the dispersion dispersion, in chemistry
dispersion, in chemistry, mixture in which fine particles of one substance are scattered throughout another substance. A dispersion is classed as a suspension, colloid, or solution.
 of villages in Iran and the communication difficulties, this might in practice have deprived some members of the benefits of the societies. This may partly explain the bitterness and objections of the members of smaller cooperatives toward such a plan from its early beginning [6].

The most important objectives and duties of Iran Rural Cooperatives are as follows:

1. Development, linkage and transfer of data between the networks of member cooperatives

2. Accurate identification of potentials and capabilities in the agriculture sector, including poultry, animal husbandry, wheat farming, horticulture, etc.

3. Expansion of workshops and factories as well as conversion, packaging and export industries

4. Accurate information dissemination dissemination Medtalk The spread of a pernicious process–eg, CA, acute infection Oncology Metastasis, see there  to the network with regard to the purchase and sale as well as local, regional and international marketing of agricultural products

5. Expansion of credit agencies for extending loans to members.

6. Marketing and sale of agricultural products such as onion, potatoes, cotton, saffron saffron, name for a fall-flowering plant (Crocus sativus) of the family Iridaceae (iris family) and also for a dye obtained therefrom. The plant is native to Asia Minor, where for centuries it has been cultivated for its aromatic orange-yellow stigmas (see , barley barley, annual cereal plant (Hordeum vulgare and sometimes other species) of the family Gramineae (grass family), cultivated by humans probably as early as any cereal. , etc.

7. Marketing and sale of horticultural hor·ti·cul·ture  
1. The science or art of cultivating fruits, vegetables, flowers, or ornamental plants.

2. The cultivation of a garden.
 products such as apple, pistachios, almonds, grape, raisins, plum, etc.

8. Distribution of materials needed by the sector, for e.g. insecticides insecticides, chemical, biological, or other agents used to destroy insect pests; the term commonly refers to chemical agents only. Chemical Insecticides
 and chemical fertilizers

9. Distribution of modified seeds

10. Supply and distribution of essential goods and other imported products needed by members in rural areas plus distribution of such goods at convenience stores The following is a list of convenience stores organized by geographical location. Stores are grouped by the lowest heading that contains all locales in which the brands have significant presence.  throughout the province

11. Import of agricultural products

12. Export of agricultural products

13. Participation in international exhibitions to identify new markets for agricultural products

14. Participation in specialized seminars and events

15. Collection, classification, packaging, storage, conversion, transporting, purchase and sale of goods and products of members.

Rural Credit cooperatives in Iran:

Although rural credit cooperatives in Iran are expected to play important roles as the basis of the rural finance, they cannot fulfill their function as expected and cannot transform themselves into organization of cooperative society cooperative society

a commercial enterprise owned and run by customers or workers, in which the profits are shared among the members
. At Present, the major activity of the cooperative is to provide loans to their members. The loans are principally financed by the agricultural bank and a small share of them is provided out of the cooperatives' own capital and reserves. But these sources are not enough to meet peasants' credit needs.

The demand of rural households for credits can be categorized cat·e·go·rize  
tr.v. cat·e·go·rized, cat·e·go·riz·ing, cat·e·go·riz·es
To put into a category or categories; classify.

 into commercial demand and social welfare demand. The former may be met by formal or informal financial service providers and the latter by government agencies.

Some cooperative organizations' efforts have been directly involved in credit problems. They are for the purpose of enabling members to meet their basic needs. Their social responsibilities are to create communities where people can enjoy their villages by working together.

Rural financial and credit funds have been favored by politicians and planners of agricultural affairs as effective institutions in providing financial and credit services which lead to expansion and development of rural and agricultural activities [23]. Recently, establishing rural credit funds have been viewed by majority of countries, especially the third world countries as a mean for securing needed capital and credit for rural producers [4]. The same holds true for Iran, in which establishing and expanding rural credit funds is accomplished by collecting small capitals of farmers and producers. This important accomplishment not only creates spirit of cooperation in rural areas, but also plays an important role in alleviating financial needs of rural people and also expansion of agricultural production activities [15].

Recently, Iran's government has played an important facilitating role in promoting this reform process. It has assisted local organizations to establish rural credit cooperatives in a number of villages.

Laws and Regulations:

The cooperative law (for rural cooperatives in Iran), enacted in 1971, officially recognizes indigenous saving and credit cooperatives as financial market intermediaries if they are locally registered. The purpose of enacting cooperative law should be to give a legal status to the cooperatives and facilitate their working. It should also ensure that cooperatives work as genuine bodies and in accordance to the universally accepted cooperative principles. The legal framework for cooperatives consists of the law, rules made under it and the byelaws adopted by the members of cooperatives in accordance to the act and rules. This together makes up procedures and rules for the organization and work of cooperatives, and protect and preserve their cooperative character. The Cooperative Law thus should facilitate the working of cooperatives and should not curtail cur·tail  
tr.v. cur·tailed, cur·tail·ing, cur·tails
To cut short or reduce. See Synonyms at shorten.

[Middle English curtailen, to restrict
 the autonomous working of cooperatives and change their basic character. The day-to-day working regulations should be included in the bye-laws.

The Cooperative Laws, as stated above, consists of a Cooperative Act, enacted by the legislature of the country; subsidiary to the Act, in some countries, rules framed by the Government; and bye-laws as adopted by the members and registered under the Act. In case of conflict among the three i.e. Act, Rules and Bye-Laws, the Act is supreme, followed by the Rules, and then Bye-Laws. The Act should include the basic provisions relating to relating to relate prepconcernant

relating to relate prepbezüglich +gen, mit Bezug auf +acc 
 the principles, membership, registration requirements, management pattern, arbitration, liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts.

A type of proceeding pursuant to federal Bankruptcy
, etc. The best law is that which is simple and brief, which can be understood by the common man, and which does not need plethora plethora /pleth·o·ra/ (pleth´ah-rah)
1. an excess of blood.

2. by extension, a red florid complexion.pletho´ric

 of sub-rules. Working details should be left to the members, to be included in the bye-laws.

The important provisions of the law are examined under the following headings:

a. Cooperative definitions, objects and cooperative principles

b. Registration

c. Membership

d. Management

e. Funds/Capital

f. Facilities and Concessions

g. Disputes

h. Penalties

i. Winding up

j. Rule-making power

The Investigated Province:

Mazandaran is one of the most densely populated pop·u·late  
tr.v. pop·u·lat·ed, pop·u·lat·ing, pop·u·lates
1. To supply with inhabitants, as by colonization; people.

 provinces in Iran and wealthy regarding diverse natural resources also gross reservoir of Caspian oil & natural gas. The province's four largest counties are Sari, Babol, Amol, and Qaemshahr (All situated on the Mid-East).

It has a diverse nature & climate including plains, prairies, forests and jungles ranges from the sandy beaches to the rugged and snowcapped Alborz sierra. Mount Damavand This article is about the volcano. For the city, see Damavand City.

Mount Damāvand (Persian: دماوند) also known as Donbavand, is a dormant volcano in Iran.
, the highest peak & volcano volcano, vents or fissures in the earth's crust through which gases, molten rock, or lava, and solid fragments are discharged. Their study is called volcanology.  throughout Middle-East and Western Asia, is located in the southern part of this province.

A major producer of farm fish all around of Iran and the neighboring neigh·bor  
1. One who lives near or next to another.

2. A person, place, or thing adjacent to or located near another.

3. A fellow human.

4. Used as a form of familiar address.

 regions, Mazandaran is the leading economic base of agriculture & fish productions in Iran.

Mazandaran has a very rich history. Its human habitation HABITATION, civil law. It was the right of a person to live in the house of another without prejudice to the property.
     2. It differed from a usufruct in this, that the usufructuary might have applied the house to any purpose, as, a store or manufactory; whereas
 of the area dates back to at least 75,000 years ago. It is one of the most important historical sites of Iran and has played an important role in cultural flourishing and urban development of the region.

Rice, grain, fruits, cotton, tea, tobacco, sugarcane, and silk are produced in the lowland strip along the Caspian shore. Oil wealth has stimulated industries in food processing Food processing is the set of methods and techniques used to transform raw ingredients into food for consumption by humans or animals. The food processing industry utilises these processes. , cement, textiles, cotton, and fishing (caviar caviar or caviare (kăv`ēär), the roe (eggs) of various species of sturgeon prepared as a piquant table delicacy. )


Pilot program:

The goals of the proposed Rural Finance Sector Restructuring and Development Program are to ensure sustainable access to institutional financial services for a majority of rural households. Specific objective is to support a sustainable financial cooperative system for providing affordable services, primarily to the middle and lower segments of the rural finance market for a significant income expansion impact and rural development. Increased financial intermediation will provide opportunities to clients to increase incomes and employment and improve their quality of life through access to strengthen and responsive financial cooperative system. It can be realized from figure 2, in order to leading a successful financial system (crediting) for the investors as well as the welfare of their communities, the production stage must be followed by the Credit and saving stage, and then the Supply of inputs stage, and completed by the Marketing stage [7].

With the establishment and operation of these units since the start of this project in 2007 until the end of January 2010, the number of rural cooperatives credit units has increased from 5 units to 62 units in the province. These units has deposit over 616 million rials.

The Solving of financial problems such as the needs for agricultural production and commercial operations (planting and harvesting), increasing of credit resources for rural needs, lower cost loans, directing resources toward the production of commercial banks, eliminating of credit sources from the budget and building capacity for the economy, increasing the investment and liquidity and strengthen financial resources of the network is the most important goals of this project.


We can express the main problems and their solutions in Mazandaran cooperatives at table 2:


Cooperatives in Iran particularly in the rural areas have up till now been enjoying Govt. support and protection in the shape of subscription to share capital, preference in the matter of grant of licenses, reservation of certain products for co-ops, etc. These props are being gradually withdrawn and co-ops have to face competition not only from the private sector but also from the NGOs in micro finance and poverty alleviation activity and from Multinational Corporations in the field of agricultural and industrial production and consumer retail trade. On the other hand, the relationship between a well-developed financial sector and economic growth and poverty alleviation is well-established. The relationship is not merely one of correlation, but causal. There are robust evidences that countries with better developed financial systems experience faster reductions in income inequality and faster rates of poverty alleviation. Thus the development of an efficient financial system should be at the center of a pro-poor development strategy. Therefore, so many plans and restructuring programs are being implemented for the well being of credit cooperatives within the past 3-4 years.

In order to build a diversified and competitive rural financial market, there is a need to broadly rethink re·think  
tr. & intr.v. re·thought , re·think·ing, re·thinks
To reconsider (something) or to involve oneself in reconsideration.

 rural financial reform and development strategies. The restructuring program would require the government to inject in·ject
1. To introduce a substance, such as a drug or vaccine, into a body part.

2. To treat by means of injection.
 new capital. The government is increasingly demonstrating its recognition of the importance of better understanding the lessons of past reforms, and it willingness to take a more comprehensive approach to future reforms.


[1.] Amid, M.J., 1949. Agriculture, poverty and reform in Iran, London: Rutledge, 1990.

[2.] Aref, A., 2011. Barriers of Local Participation in Rural Cooperatives A Case Study of Fars, Iran. Journal of American Science, 7(1): 670-673.

[3.] Bakhshoodeh, M and A. Karami, 2008. Determinants of poor accessibility to microcredits in rural Iran, International Conference on Applied Economics, pp: 67-71.

[4.] Davidovich, J., 1991. Towards the world of cooperation, Publication No. 13, State Central Cooperative Organization, Tehran, Iran.

[5.] De Janvry, A. and E. Sadoulet, 1995. Rural poverty and differentiated rural development programs. Rev. Econ., 18: 3-36 (In Spanish).

[6.] Denman, D.R., 1973. The king's vista: A land reform which has changed the face of Persia, Berkhamsted: Geographical Publications.

[7.] Galor, Z., 1990. Conditions from the Success of a New Moshav moshav

(Hebrew: “settlement”) Israeli cooperative community that combines privately farmed land and communal marketing, sometimes with light industry as well. The land on a moshav belongs to the state or the Jewish National Fund.
: The Stage-by-Stage Approach, Hassadeh Quarterly, Israeli Review of Agriculture, 1(2).

[8.] Ghiasvand Ghiasy, F., J.F. Hosseini, I. Malekmohammadi and S.M. Hosseini, 2009. Factors influencing the entrepreneurship in Iran's agricultural cooperatives, Australian Journal of Basic and Applied Sciences, 3(2): 1170-1176.

[9.] Guinnane, T.W., 2001. Cooperatives as information machines: German rural credit cooperatives1883-1914, Discussion Papers 9720, University of Copenhagen The University of Copenhagen (Danish: Københavns Universitet) is the oldest and largest university and research institution in Denmark. . Institute of Economics. Journal of Economic History, 61(2): 366-389.

[10.] Hooglund, E.J., 1982. Land and Revolution in Iran, 1960-1980, University of Texas.

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[12.] Karimi, Z., 2005. The role of credit in employment growth in cooperative: The case of Iran",

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International Labor Organization

Noun 1. ILO - the United Nations agency concerned with the interests of labor
International Labor Organization, International Labour Organization
 recommendation on the promotion of cooperatives. Paper for Expert Group Meetings on Supportive Environment for Cooperatives: A Stakeholder stakeholder n. a person having in his/her possession (holding) money or property in which he/she has no interest, right or title, awaiting the outcome of a dispute between two or more claimants to the money or property.  Dialogue on Definitions, Prerequisites and Process of Creation. Ulaanbaatar, Mongolia.

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HTM Hand To Mouth
HTM harmful-to-minors
HTM Held-to-Maturity
HTM High Tide Mark
HTM Hazlo tú mismo (Spanish: do it yourself)
HTM Hierarchical Temporal Memory

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New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of
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Seyyed Mohammad Karimi

Ph.D Student, National University of Tajikistan

Corresponding Author

Seyyed Mohammad Karimi, Ph.D Student, National University of Tajikistan
Table 1: Credit sources for rural household in Iran

Sources                                      Number   Percentage

Formal                                       4622     80.3
Agricultural Bank          By farmers        1480     25.7
                           By cooperatives   1862     32.4
Commercial Banks                             992      17.2
Gharzolhasaneh Sandoogh                      288      5
Informal                                     1129     19.7
Local traders                                104      1.8
Forward Purchasers                           75       1.3
Friends and relatives                        852      14.8
Other                                        98       1.7

Total                                        5751     100

Sources                                      Volume     Percentage

Formal                                       6566       81.7
Agricultural Bank          By farmers        3685.8     45.9
                           By cooperatives   664.7      8.3
Commercial Banks                             2202.1     27.4
Gharzolhasaneh Sandoogh                      13.7       0.1
Informal                                     1468.2     18.3
Local traders                                14.9       0.2
Forward Purchasers                           18.1       0.2
Friends and relatives                        1415       17.61
Other                                        20.2       0.3

Total                                        8034.5     100

Source: Agricultural Bank

Table 2: The main problems and their solutions in Mazandaran

Row     Cooperatives' problems and      solution

1       Lack of coordination and        Studying the whole aspects of
        correspondence between          provinces' capacity and the
        provinces' capacity and the     regions' talent before
        establishment of the            establishing the cooperatives

2       Lack of precise control by      Precise controls by the banks
        the banks on accomplished       while dedicating the loans
        cost's trend in cooperatives    And loan's stage repayment
                                        regarding to project's
                                        physical development

3       Lack of enough support and      Cooperative's permanent
        absence of appropriate          support and guidance and
        solution of administrations     control, and create the
        for cooperatives to continue    frontier markets in order to
        their activities                recognize and present the
                                        domestic production to the
                                        other countries and to create
                                        suitable domestic and
                                        international market to
                                        export commodities and to
                                        create comprehensive fields
                                        to present technical and
                                        engineering services

4       Managers' low level of          The applying and compulsory
        knowledge                       training to cooperatives'
                                        managers and inspectors in
                                        order to get more
                                        acquaintances to their duties

5       Not allocating the needed       Regular programming for
        loan to applicant               dedicating the facilities to
        cooperatives                    qualified cooperatives by
                                        injecting the cash flow

6       Not to issue authorization to   To issue authorization and
        some service cooperatives       facilitating and making it
        such as credit and not to       transparent for service
        issue the grade to qualified    cooperatives and to issue the
        cooperatives by programming     grade to qualified
        manager                         cooperatives and not to
                                        impose trifle severity

7       Existence of doubled            Eliminating dispersed and
        bureaucracy in the              trifle bureaucracy and the
        administrations                 cooperation among the
                                        responsible of such
                                        governmental administrations
                                        and to present services

8       Lack of appropriate land/lack   Providing an appropriate land
        of sale support/expensive       by responsible
        pesticides/environmental        administrations, and
        disagreement with               supporting products' sale,
        establishing animal husbandry   environmental cooperation in
        cooperatives                    the case of establishing
                                        animal husbandry cooperatives
                                        and presenting appropriate

9       Not to issue justification      To issue justification by the
        and not completing the          administrations in related
        credits' application files      province
        for cooperatives in the
        province of established

10      Not to issue activity           To issue justification in the
        authorization in the name of    name of cooperatives without
        cooperatives by ministry of     mentioning the manger's name
        industry, mine and trade        because of repetitive change
                                        of director's name
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Title Annotation:Original Article
Author:Karimi, Seyyed Mohammad
Publication:Advances in Environmental Biology
Article Type:Report
Geographic Code:7IRAN
Date:Jun 1, 2012
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