The Role of Private Investment in Rural Development

In this thesis, an attempt has been made to study in two stages the role of unofficial capitals in rural development. In the first stage, as an introduction to investment in agriculture, the function of official and unofficial capitals is investigated. One of the main aims of the government with respect to rural development is to offer loans through banks.  This   has some advantages, but also two disadvantages, which has been addressed in this thesis. First, although the rate of interest of such official capitals is relatively low, bureaucratic formalities prevent the majority of farmers from using such loans. Second, the banks   that offer loans have no control over the way the loans are spent. In practice, the policy of offering low-interest loans has failed in its aim of rural development. In the second stage, an analytic model was used on33 development indexes (economic, social, fundamental) in 32 villages and Isargaran wholesale fruit center. The purpose was both to evaluate the relation between whole sale fruit centers with rural areas from economic and social points of view and to evaluate the purchasing power of this center and its function and investment power in the whole country .the results of the second stage showed that first, because of developments in transportation and communication, villagers now have a better understanding of the factors influential in the market and the traditional and healthy relation between producers and sellers in the wholesale fruit center has decreased. Second, although the fruit produced in the south of the country are of bad quality, wholesale fruit sellers prefer to buy fruit from the north or the fruit produced in the province. It is to be noted that this wholesale fruit center is rich enough to do investment throughout the country, but so far, it has failed to play a part in the economy at a national level. Finally, an attempt has been made to offer a suitable pattern for the area under study and to attract the attention of policy makers by showing the shortcomings of the present programs.