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The interest rate structure and factors affecting interest rate determination in the informal rural credit market in Sri Lanka

The interest rate structure and factors affecting interest rate determination in the informal rural credit market in Sri Lanka

Savings and Development 12(3): 249-269

Despite Government policies aimed at reducing its relative importance, the imformal sector continues to be the dominant source of rural credit in Sri Lanka. A common presumption behind the Government policy paradigm relating to the informal sector in the rural financial market has been that its interest rates are exorbitantly high and rural money lenders are exploitative, parasitic and, therefore, hinder agricultural development.

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