Reasons for credit rationing in agricultural credit markets of transition countries: The situation in Azerbaijan and Bulgaria

This paper provides reasons for credit rationing on agricultural credit markets in Azerbaijan and Bulgaria. The empirical part of the paper was carried out by means of expert interviews in both countries. These interviews were analyzed by means of a qualitative content analysis. The results of the expert interviews reveal the reasons for the credit rationing in both countries: Transaction costs play a significant role for credit rationing because (possible) lenders face high cost to get information about a (possible) borrower. Additionally they face high monitoring costs. Other factors for credit rationing in Azerbaijan and Bulgaria are: a lack of confidence in farmers as borrowers, the low profitability of farms, the small-scale structure of farms and an underdeveloped property market.