Introduction

After land reform, some actions have been done for rural finance by creating financial institutions such as credit cooperatives, Agriculture Bank and interest-free loan funds which were not successful in improving poor people livelihood. The studied area in this study includes a forest-mountain area that have small and sporadic villages and they are far from rural-urban continuum. In fact, these areas face with basic shortcomings because of their location in geographical isolation, lack of development of market, scattered villages, low population density and unavailability of services (including financial services). Researchers' preliminary studies in this area showed that in financial markets of the forest-mountain villages in Bandpey part of Babol county, for rural finance to meet their needs in micro level, include just officialpublic institutions and semipublic ones (agriculture Bank, credit cooperatives and Imam Khomeini Relief Foundation) that were not operating as rural financial institutions, so in the studied area this question is raised that in spite of the availability of financial institutions, why the level of financing services is low for villagers? Or in other words, why the available financial institutions could not be successful in attracting villagers? Therefore, the question is that what are the characteristics of financial institution for being successful in presenting financial services? This study aims to recognize optimality criteria in institutions that offer financial services in rural districts and tries to present a framework in rural financial institutionalization to help rural managers and development planners in rural financial domain such as Agriculture Bank, rural financial cooperatives, Imam Khomeini Relief Foundation and rural interest-free loan funds.

Methodology

Ito consider the subject, a qualitative approach has been chosen in this study. So, 25 villagers that are residents of forest-mountain villages of eastern Bandpey in the county have been selected in a purposeful way; data collection has been done through in-depth semi-structured interviews to the theoretical saturation point. Following that, for more clarification and conducting in-depth interview, some follow-up and exploratory questions have been used. After each interview, all the statements were written on the paper. The obtained data from interviews were analyzed by using qualitative content analysis method (by the framework of an inductive approach). To increase the creditability and acceptability of data, these methods have been used: simultaneous data analysis, continuous observation, review by supervisors and selecting the main informants; accuracy and authenticity of data (stability) have been considered too, regarding these indicators: maximum number of participants, desirable relation with participants, accuracy in recording data, using external researchers and supervisors, long time engagement with research and obtained data.

Discussion and Conclusion

On the major subject that is extracted is "flexibility". On the major subject that is extracted is "flexibility". Flexibility of rural financial institution means the flexibility in time duration for loan repayment that does not interfere with planting season and the time that farmers and ranchers should spend money for their works. The results show that when the time of loan repayment interfere with the time that small farmers do not have cash money, this leads to excluding some people from taking credits and more than that those who were able to take the credit, could not gain enough profit. Availability is a criterion in rural space that have low level of livelihood, in faraway geographical location is of great importance. In one hand, availability means physical availability. This criterion can be understandable when rural forest-mountain area is understandable. These areas face with problems because of dispersion of villages and their distance from urban area to receive services including financial services. In another way, lack of finance leads to irresponsibility. Considering the findings showed that if rural financial institutions were dependent to government subsidies, offering credits to meet villagers' needs would be uncertain all the time. Another criterion, a sub-dimension of availability, is "having responsibility regarding to the conditions that farmers face with a social-economic problem". In one hand, small farmers and ranchers' livelihood is always exposed to natural, social and economic crisis (especially in forest-mountain regions), and in another hand, their week financial support make villagers vulnerable to these kind of dangers. The obtained results showed that optimality of a rural financial institution is related to offering services in all dimensions of financial services especially loan, saving and insurance. Therefore, one the most important issues for optimality of the rural financial institutions is the capacity of saving for small farmers and ranchers; they have high desire for saving. Official financial institutions and semi-official ones could not support this dimension of villagers' need with a commercial approach. According to the findings, villagers do not consider financial institutions as merely a monetary institution; they expect an appropriate financial institution not only offer monetary services, but also they expect them offer social services that need investment, or assignment of subsidies on their necessary products for their agriculture. The study findings showed that the assigned small loan is a loan for agriculture not for the farmer, and it rarely considers the need of the villagers for consumption. It is suggested that researchers on institutional issues and service institution in rural districts consider these issues in the time of occurrence and with direct observations and interviews; they should familiarize with their challenges and by a topdown and bottom-up approach, they can present a suitable strategy for the same areas to overcome their problems.