The role of microcredits in the development of mountainous and plain rural areas (A case study of the villages of Kardeh and Miyan-velayat in the Mashhad County)

Not so long ago, the main obstacle to the development of undeveloped countries was thought to be the lack of capital. However, today it is believed that capital is a necessary condition for development, but not the sufficient one. Therefore, one of the strategies to achieve economic development is to make use of an efficient financial system to circulate stagnant capitals in the community. Accordingly, micro-credits were introduced in developing countries over the past 30 years, aiming to provide low-income groups with financial services. These funds are used to provide villagers with loans, particularly those who are active in production. The availability of liquidity helps villagers meet their financial needs and start a production process and get agricultural products for plantings. The study also aimed to examine the role of microcredits in rural development, with emphasis on the impact of geographical factors in attracting such funds in mountainous and plain rural area of the Mashhad County. This study is an applied research carried out in a descriptive-analytical method. Based on Cochran's formula, 207 rural households were selected. The ratio of households in each area was also calculated by Cochran's formula to be a total of 90 households from mountainous areas, and 118 households from plain areas that were selected. The required data were collected from library sources and the survey (questionnaires) among the households that received the funds. The results showed that the effectiveness of microcredits is not significantly different in mountainous and plain areas. However, there is a significant difference between the two areas considering the difficulties and satisfaction level of villagers in getting the loans, such that villagers in plain areas were more satisfied than those in mountainous areas.