JOSELITO S. ALMARIO

Bridging the Supply and Demand Gap on Financial Services for Rural Households

4th Microfinance Best Practices Forum

Crown Regency Towers, Cebu City

June 9-10, 2011

SOME FACTS ON

AGRICULTURE FINANCE

For decades, a priority of the Philippine

Rural Development Strategy

Financing traditionally provided by input

suppliers, traders and processors

Private sector FIs still reluctant to lend to

small farmers due to poor repayment

rates

Government still tempted to provide

subsidies

WHY RELUCTANCE TO LEND

TO AGRICULTURE

• Natural Calamities

• Pests

• Diseases

PRODUCTION RISKS

• Infrastructure

• Access to Markets

• Information

MARKET RISKS

• Government Subsidies

• International Agreements

• Smuggling

POLITICAL RISKS

COMMON

INTERVENTIONSSubsidies Fertilizers

Seeds

Credit

Guarantees

Crop Insurance

Are they effective?

WHAT CAN BE DONE

AgriRisks

Household income and

Frequent Payments

Micro-insurance

Credit Information

System

Moveable Collateral Registry

Contractual Arrangements

AGRIFINANCE FACES MANY

RISKS

THESE RISKS MAY LOOK

FORMIDABLE

BUT

THEY ARE NOT

INSURMOUNTABLE