This report examines a sample of 42 financial institutions in Latin America that have agricultural portfolios, and identifies their principal perceived risks, how they assess and manage credit risk, and how effective they are in the process as measured by key financial performance indicators (such as asset quality, portfolio growth, and profit margins). The report makes several recommendations for donors and governments. The preferred or best option is to provide support to rural institutions that meet minimum scale requirements that would permit easy diversification of credit risk, and help them to expand and innovate. In countries where these types of rural financial institutions are absent, the second best option would be to assist those institutions that have a clear strategic commitment to the rural sector as well as competent management to upgrade their technologies, diversify, and introduce risk transfer instruments.