The groundwork for agriculture co-operative finance in a transition economy

For transition economies, where farming is centred around relatively small farms or groups of small farms, organisation into co-operatives will be eff ective. Credit co-operatives can teach private farmers about the market eco nomy by helping them to prepare farm plans and to learn about borrowing at their own risk as well as the process of repaying the loans. Agricultural c redit co-operatives will also provide incentives to save and will promote t he recycling of funds in the farming sector. The experience of the Credit U nion in the Kyrgyz Republic provides a good example.