Study on the Evolution of Agriculture Credit Market in Romania
Study on the Evolution of Agriculture Credit Market in Romania

Summary/Abstract: The situation of agriculture in Romania is rather controversial as it is in the first ten countries of the European Union based on the land area exploited, but at the same time faces low productivity and has the largest number of farm holdings in the EU due to the excessive fragmentation of land in small areas with consequences on their productivity. Financial institutions in Romania are still reserved when it comes to lending to companies in the agriculture sector due to the specific risks this activity involves. The objective of the paper is the determination of the present situation of agriculture lending in Romania as a prerequisite for a complex study on the influential factors of loan loss provisions in the case of agriculture loans. The study concentrates on the relation of credit volume disbursed for the last 12 years with data regarding the gross domestic product of the country for highlighting the contribution of agriculture to GDP and the attention this economic sector receives from banks’ perspective. The research is based on an analysis of reports issued by the National Bank of Romania and available data from World Bank and FAO. The results consist of formulated answers to questions on influential factors of the agriculture credit market in Romania and the relation between agriculture share to GDP and agriculture credit in Romania.

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