4 managing risks in agriculture finance by mr. almario
TRANSCRIPT
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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
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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
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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
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COMMON
INTERVENTIONSSubsidies Fertilizers
Seeds
Credit
Guarantees
Crop Insurance
Are they effective?
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WHAT CAN BE DONE
AgriRisks
Household income and
Frequent Payments
Micro-insurance
Credit Information
System
Moveable Collateral Registry
Contractual Arrangements
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AGRIFINANCE FACES MANY
RISKS
THESE RISKS MAY LOOK
FORMIDABLE
BUT
THEY ARE NOT
INSURMOUNTABLE