USAGE OF GUARANTY SYSTEM FOR AGRIBUSINESS CREDITING IN REPUBLIC OF MACEDONIA

Abstract

Finance, as driving force is critical to increasing efficiency, improving product quality, and raising the productivity and income of agribusiness actors. Without access to finance, small and medium size agribusiness entreprices will continue to make little investment, have low- return production systems, and be unable to use their farm resources optimally. Similarly, financial constraints may prevent agro-food processors from expanding their capacities, thus limiting the amount of produce they can sell in the market. However, as a notoriously risky business, agribusiness is not in the central interest of commercial banks, especially in economies such as Macedonian. Solution for such a condition are development banks, through which State perform certain financial services which commercial banks avoid, due to the high credit risk. This paper examines crediting as source of financing in agribusiness, focused on the risk, as limiting factor. The main purpose of this paper is to emphasize the role that state has in overcoming the mismatch of the demand and supply of money in agribusiness and the importance of ACDF’s operations in expanding the outreach and accelerating economic welfare of agribusinesses in the Republic of Macedonia.