Value Chain Financing for Agriculture and Rural Microenterprises

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Although 70% of the poor reside in rural areas in the Philippines, the agriculture sector has been consistently lagging behind in development. One essential element of agricultural/rural development is access of poor farmers and rural households to affordable financial services. Nearly two-thirds of rural folks borrow from usurious informal sources. Microfinance is looking for ways to foray into the rural areas, and although it presents a great potential in closing the funding gaps in rural finance, microfinance institutions (MFIs) find themselves ill-equipped to handle the risks of agriculture. 

In addressing these issues, the Microfinance Council of the Philippines,Inc. (MCPI) and PinoyME Foundation organized the conference, Value-Chain Financing for Agriculture and Rural Microenterprises, attended by over 180 stakeholders of rural enterprises from MFIs, to private financial institutions, to business development service providers, and government financial institutions. The evolution of value-chain financing is becoming an attractive model of spreading the risks in rural finance among different providers. Locating agriculture microfinance within a stream of funding strategies presents excellent opportunities for plugging gaps in rural finance.

The value chain financing paper is the end result of the said conference, wherein different key players were able to identify risks and potential mitigating measures in pursuing this strategy in providing financing to very vulnerable but highly potent rural enterprises of the poor.

Document  -  English (en)

Document Information

Document Type Report
Author Alemberg Ang
Year of Publication 2012
Publisher MCPI and PinoyME
Number of Pages 32 pp.
Region / Country Global /
Primary Language English (en)
Keywords
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