The Department of Agriculture has set aside P1 billion for a lending program to help farmers, fishers and rural entrepreneurs and has also called on rural banks to provide rural folk greater access to funds.
In a statement, Agriculture Secretary Proceso J. Alcala urged members of the Rural Banks Association of the Philippines (RBAP) to implement innovative financing programs and to partner with the DA in the implementation of the Agro-Industry Modernization Credit and Financing Program (AMCFP).
“We have to ensure that no one will be left behind and that all Filipinos, especially those in the countryside, can enjoy the benefits of economic growth,” Alcala said.
AMCFP funding this year is less than the P1.12 billion allocated in 2012, but is more than twice the P446 million made available in 2011.
According to the Agricultural Credit Policy Council (ACPC), the DA aims to enable 85 percent of some 8 million farmers, fishers and rural business owners who need credit to have access to funds.
ACPC director Jovita Corpuz, said in an interview that only 52 percent of these potential borrowers were being served as of 2008.
“Of course, not all of them may turn out to be qualified for loans, but we also have complementing initiatives such as innovative financing schemes as well as capacity-building activities,” Corpuz said.
ACPC data show that the amount of lending related to agricultural production ballooned five times from P41 billion in 1990 to P231.8 billion in 2011.
Alcala said collaboration between the DA and rural banks must be strengthened, particularly since 118 members of the RBAP have been actively participating in the Agricultural Guarantee Fund Pool.
He explained that the AGFP was created in 2008 to encourage banks to lend to the agriculture sector.
It provides guarantee coverage to unsecured loans extended by lending entities—such as rural and cooperative banks—to small farmers engaged in rice, corn and food production projects.