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Local financing in rural areas

[ Summary ]


Chapter 4:
Challenges for the future


What are the next local financing challenges that LEADER must face? In order to answer this question we must first ascertain:

  • which avenues have already been fully explored that provide a sound basis on which to build;

  • which are the forms of financing where interventions have, by contrast, remained sporadic and still require a great deal of methodological capitalization and transfers of experience;

  • which financing formulas of importance to rural development have not yet received LEADER support and for which work must start from scratch.

By referring to our summary table on the potential links between funding supply and demand, presented at the end of Chapter 2, we can - in the light of Chapter 3 - briefly outline the various forms of LEADER financial intervention.


Overview of LEADER’s fields of financial intervention

  • In bold characters: major LEADER intervention - Significant and consolidated methodological experience acquired

  • In italics: ad hoc LEADER intervention - Need for methodological capitalization and transfers.

      underlined: with LEADER funds;
      not underlined: without LEADER funds.

  • In normal characters: no LEADER intervention


There are of course financing formulas, which, by their very nature, escape LEADER’s field of intervention. This is the case with “major” financing. However, there are also formulas that LEADER has not yet tried out but which can play a key role in the local development of rural areas. This applies in particular to ethical banks and products.

The future challenges facing LEADER therefore vary from case to case:

  • Where interventions involving new forms of financing have already been practised extensively and have become widespread, the challenge is more to systematize the lessons learned and ensure exchanges of experience in order to achieve excellence. This is the case with “minor financing/levers”, in the form of direct subsidies, for which considerable progress has been made and the LEADER groups’ know-how is very advanced [30];

  • With regard to formulas explored by only a few LEADER groups or by a larger number of LAGs in a superficial manner, the problem lies in disseminating and transferring the lessons learned from these experiences, as well as in acquiring skills and setting up collective consultations about the potential of these new avenues and the best methods for getting there. This particularly concerns initiatives involving commercial banks, finance facilitation structures like LEADERFIDI and GALCOB Initiative and structures initiated by civil society, like FILTARN;

  • finally, with regard to financing formulas that have not yet been explored, it is of utmost importance to implement pioneering initiatives, which could play a pilot role at European and national levels.

However, in the latter two cases, many initiatives already exist unrelated to LEADER, particularly in urban areas. It is therefore becoming increasingly necessary to set up exchanges and links with them.

In all three scenarios, inter-territorial cooperation, either among rural areas themselves or between rural and urban areas, is a key element to meeting the challenges that local development financing will pose in the future.

In view of LEADER’s varied experience of these three types of initiative, we shall analyse the various challenges posed by each of the three scenarios, stressing the points where further analysis is desirable and on which future efforts could be focused.


[30] See for example “De la stratégie à
l’action: la sélection des projets locaux”, 1998,
LEADER European Observatory/AEIDL.

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