Substantiation of financing approach for rural property

Abstract

In resolving issues of revival of rural property it is crucial to deal with the subject of financing. Existing financial methods are aimed at solving specific financial tasks and define relations of contract parties as well as their distribution of risk/liability in the way peculiar to those specific conditions. Different financial schemes have been created for concrete cases and in those concrete cases they are the most suitable. Therefore in order to activate investments into rural property of Lithuania it is needed to devise a financing approach which is useful and economically motivated to all sides of the credit contract. Taking into consideration that state government is largely interested in revitalisation of rural property, it has to pass some concessions: tax relieves, state loans, interest subsidies, subventions, respite in loan payments and another financial aid. To ensure control of this process it is needed to establish a controlling and co-ordinating institution: a Fund for Revitalisation of Rural Property. Its principal duties would be to make decisions on granting of financing and providing of concessions. The authors are working on a system of criteria for evaluation of efficiency of rural property financing methods. It will contain quantitative and qualitative criteria for evaluation of efficiency of rural property financing methods.