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The potential to create financial resources can be achieved, in even relatively remote rural areas, when the rules governing land (either formal or traditional) make sales or transactions binding (legal registration or communal agreement) and the capacity to transact is seen to be stable and continuing. In this way, a return can be anticipated by buyers who will want to know that they can dispose of the land in the future. Even in remote areas, small parcels of land have collateral value as revealed in past land reforms, where lands frequently became consolidated into larger holdings by money lenders or former owners. However, given the particular nature of rural reform, the appropriate financial instruments required will usually be nontraditional, such as land banks, as in The Philippines, or through community trust funds whereby lending institutions find repayment confidence through its peer-based character. The effectiveness of peer-based approaches has been demonstrated in microfinance programmes in a number of countries.
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