Agricultural Loans in the Banking System in Moldova: Opportunities and Challenges for Sustainable Development

Abstract

The agricultural sector in Moldova is very important and contributes to the economy through the GDP and employment. Considering the country’s natural resources, the agricultural credit is very important for assuring food security, getting competitive benefits, and backing balanced development. This paper covers the agricultural credit analysis for three and a half years and projects the period under review to extend until 2024. Emphasis is made on the impact of governmental policy, financial regulation, and international undertakings. For all the importance it has, agricultural credit is not free of underlying challenges, such as climate risks, absence of good collateral, expensive financing, and non-adequate financial literacy of the clientele. The analysis of credit volume evolution from 2014 to 2024 shows a distinctive pattern of fluctuations which are the results of the economic conditions, changes in the policy, and the external shocks like COVID. This study finds improvement of financial infrastructure more educated farmers and public-private partnership to be critical in increasing access to agricultural credit for long-term sectoral sustainability. CZU: 336.77:338.43(478); JEL: Q14, O13