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- W2735502255 abstract "Agricultural cooperatives are an integral part of the social economy; therefore, their successful development is undoubtedly significant to the economy of country. The article deals with the issues related to the opportunities for the funding of agricultural cooperatives and problems thereof that have a decisive impact on the development of their activities. The study identified the needs of agricultural cooperatives for the financing, estimated traditional and alternative possibilities for the financing of agricultural cooperatives, analysed and summarized the challenges and potential solutions that would enable to improve the funding in the future. It was found that internal sources of financing are especially crucial for the agricultural cooperatives, especially for small ones: retained earnings, depreciation and amortization of long-term assets, net profit and asset sales revenue. However, such financing method is effective only as long as the company operates profitably. In the event of difficulties, the internal resources are often insufficient. The study revealed that two main funding trends are separated in the space of EU multiple financial possibilities. One is traditional, appealing exclusively to financial logic, and the other is an alternative form of financing, obeying social and ethical rules. The analysis of the possibilities for the use of traditional forms of financing of rural development found that these methods are not always possible in rural areas due to small-scale projects, lack of guarantees, high-risk, high costs for the project review. It should be noted that the main traditional source of financing such as bank loans are becoming less accessible. The losses incurred by banking sector in 2008-2009 as well as changed attitude towards the risks led to a significant change in lending policy. Agricultural cooperatives face the problem of financing, as the main banks in their activities focus on large companies and larger economic centres with less risk. In this case, it is essential to enable the agricultural cooperatives to use alternative sources of financing: funds of venture capital companies, investment funds and ethical banking funds. The study results revealed that alternative innovative financing methods are often more effective than traditional, but this capital market is not sufficiently developed in Lithuania. Innovation in finance to solve the needs of the rural sector should not be limited to financial institutions. The government can play a proactive role by promoting laws and regulations with new financial instruments or even raising awareness of existing ones to bring them to the attention of the financial and agricultural sectors. JEL Codes: Q13, Q14. DOI: https://doi.org/10.15544/ssaf.2017.04" @default.
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- W2735502255 date "2017-04-04" @default.
- W2735502255 modified "2023-09-24" @default.
- W2735502255 title "OPPORTUNITIES AND PROBLEMS FOR FINANCING OF AGRICULTURAL COOPERATIVES" @default.
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