Research Reports
Development Strategies of Mutual Finance in Agricultural Cooperatives

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AuthorPark, Seongjae
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Publication Date2007.03.01
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Original
The purpose of the study is to derive development strategies of the mutual finance in Agricultural Cooperatives as well as to propose guiding methods by the NACF(National Agricultural Cooperative Federation). We expect our study will help the mutual finance to adopt more quickly in changing environment of financial market, hence acquiring competition power in the long run.
The development strategies are derived for three groups of mutual finance in ag. cooperatives. They are large city, small city, and rural area. One development strategy for all mutual finance is irrelevant to derive because regional difference is getting bigger and tasks ahead are different among mutual finance of ag. cooperatives. For example, in big city areas, growth in business size is slowdown as competition with general banks being severe and the ratio of deposit/lending being lower as realestate market being blunt. And in rural areas, growth has slowed because of shrinking regional business, stagnation in agriculture. Hence, hard-core profitability deterioration is prevailed.
In order to accomplish the purpose of the study, we did the following;
First, we analyzed the level of influence of changing environment such as abolition of tax-free benefit, change in agriculture, etc.
Second, we categorized mutual finance in ag. cooperative based on region and characteristic, and deriving development strategies from not only assessing the different task but also analyzing the difference in efficiency among different groups of mutual finance.
Last, we derived guiding methods for each groups that will be used by the NACF, and conducting statistical analysis about relevant size and efficiency level of mutual finance order to devise standard index being used in managing mutual finance.
Examples of proposed development strategies are to make uniqueness and identification of mutual finance be stronger, to make level of coordination among ag. cooperatives be higher, to make the size bigger, to make mutual finance be more closer with regional customers, and to construct efficient and rational decision mechanism in business.
Researchers: Seongjae Park, Eui-Sik Hwang, Yongtaek Kim, Hejung Kang, Hogun Chong, Yongwon Cho
Research Period: 2006.11. ~ 2007.3.
E-mail address: seongjae@krei.re.kr
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