by Emil Q. Javier
Published in: http://www.mb.com.ph/credit-to-the-unbankable-and-underserved-part-3/
January 31, 2015
Most Filipino farmers and fisherfolk are poor because of the low productivity of the livelihoods they engage in. However, the technologies and practices to enhance productivity and reduce risks are available. Their immediate need is for operating capital with which to acquire improved seeds/breeding stock, fertilizers, feeds and crop protection and animal health drugs.
However, of the estimated six million farmers and fisherfolk households, only 28 percent have access to credit. Hence, the need for proactive and innovative government programs to encourage the lending institutions to expand coverage in the countryside.
We can, and do coerce the banks, to lend at least 25 percent of their loan portfolios to the AF sector under the Agri-Agra Law (P.D. 717) as amended by RA 10000. But the more reasonable and lasting way is a combination of: 1) measures to raise productivity and minimize risks to farmers, and 2) schemes to minimize the risks and costs to lending such as credit guarantee, insurance, credit information and quedans.
Credit guarantee and agricultural insurance are globally accepted practices to expand rural credit. We have these two schemes in place — the Agricultural Guarantee Fund Pool (AGFP) under the administration of the Land Bank, and crop, livestock and fishery insurance under the Philippine Crop Insurance Corporation (PCIC). The problem is their current coverage is only in the order of 135,000 to 220,000 farmers out of six million. These are not large enough numbers to make an impact. Their clientele should include at least one million small farmer and fisherfolk borrowers. Continue reading
Recent Comments