Agricultural transformation and implications for designing rural financialpolicies in Romania

The current depth and future development of rural finance in Romania are di scussed in the context of Romania's macroeconomic and agricultural transfor mation. The rural finance system in CEE countries is part of the overall ag ricultural support system and still serves to transfer implicit subsidies t o agriculture. The paper argues that building an efficient rural finance sy stem to address the financial demands of the private agricultural sector re quires a multi-level approach. Innovations are needed: at the finance syste m level, in particular to create an effective regulatory and supervisory fr amework and to free the Central Bank from government interference; at the l evel of financial organisations, to give highest priority to efficiency and credit worthiness when approving credit; and at the level of financial ser vices to adapt administration procedures and product design to the demands of the rural clientele.