Colombia - Rural finance - access issues, challenges and opportunities

Report No. 27269-CO Colombia Rural Finance Access Issues, Challenges and Opportunities November 2003 Colombia and Mexico Country Management Unit Environmentally and Socially Sustainable Development Unit Latin America and the Caribbean Region FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCYEQUIVALENTS CurrencyUnit = ColombianPesos US$l.OO = 2865 (December31,2002) US$l.OO = 2372 (December31,2001) US$l.OO = 2240 (December31,2000) US$l.OO = 1883 (December31,1999) US$l.00 = 1558 (December31,1998) FISCALYEAR January 1 to December 31 Acknowledgments This report was prepared by a team comprised of: Carlos E. Cuevas (team leader) and Lisa Taber of the World Bank (Operations and Policy Department, OPD); Beatriz Marulanda (lead consultant), Mariana Paredes and Miguel Arango of Marulanda Consultores; and Maria Gloria Cano, Oscar Rodriguez and Maria Teresa Mojica of Econornetria. Specific subjects were researched and drafted by Maria Jose Martinez and Alvaro Galvis, on insurance; Liliana Sarmiento and Janeth Vargas, on regulatory framework; and Luis Fernando Restrepo, on government programs. Carlos Castro worked on databases and demand analysis, while Juan Manuel Garciacarriedout the econometricanalysis. At OPD, Olivier Mahul and Nataliya Milenko contributed sections on index-based insurance and credit reporting systems,respectively. The Department also contributed funding of staff time and travel to the completion of the study. Document production was carefully carried out by Susana Coca, Melina Cholmondeleyand Cyntia Vega. The report benefited from comments by peer reviewers Aquiles Almansi (LCSFF) and Tova Solo (LCSFU), and by participants in the Decision Meeting Joaquin Cottani (chair, LCClC); Mark Cackler, John Kellenberg (LCSES); August0 de la Torre (LCRCE); JosC Maria Caballero, Natalia Gbmez, and Mathew McMahon (LCSER). Feedback received at a high-levelrural developmentseminar in BogotA in October 2003 was equally welcomed. The team deeply appreciates the support and encouragement receivedfrom managementtowards the completionof the study. A special note of appreciation to Glenn Westley at the Inter-AmericanDevelopment Bank, for making their comprehensivemicrofinanceand credit-uniondatabaseavailable. In Colombia,the team gratefully acknowledgesthe strong support and encouragementreceived from the Direccidn Nacional de Planeacidn, DNP-Deagro throughout the entire length of our work. Special thanks to Laura Mendez and JosC Luis Mmez (Deagro Director), and to his predecessors Jorge Mario Diaz and Juan Lucas Restrepo. The latter has maintained his support to our work from his current position as Under-secretary for Rural Development at the Ministry of Agriculture and Rural Development. VicePresident: David De Ferranti CountryDirector: Isabel Guerrero Lead Economist: Joaquin Cottani SectorManager: MarkE. Cackler SectorLeader: John Kellenberg Task Team Leader: CarlosE. Cuevas 11