Transcript Getting a Handle of our Agricultural Lending

MICRO AGRI PRODUCT
Module 1, Session 1
Designing a Rural Finance Product:
Getting a Handle of our Agricultural Lending
Introduction
Knowledge of the existing condition of the
agricultural sector of the country as well
as greater understanding of the credit
needs of the farmers are crucial in the
design and implementation of an
agricultural loan product.
Session Objective
By the end of the session, the participant will be able to:
• Write the policies and procedures of the
participants’ traditional agricultural lending
product (regular agri loan);
• Answer questions on whether the bank
has reached the farmers and has
effectively served them with the bank’s
existing agricultural loan product.
Agricultural Sector in the Philippines
• The Philippines is still a predominantly
agricultural country.
– Agriculture and fishery sector contributed 15% of
the GDP in 2002.
– One-third of the labor force is in agriculture.
• In 2002, the Philippines registered a total of 4.8
million agricultural farms, covering 9.7 million
hectares. The total agricultural land area
constituted 32.2% of the country’s total
land area.
Agricultural Sector in the Philippines
• Most farms are small. Average farm size is 2
hectares.
• Under CARP, 1.4 million hectares had been
distributed to 751.9 thousand farmers.
Is your bank able to efficiently and effectively
reach out to this market?
Does your agricultural loan product properly
address the need/s of the farmers in your
area without sacrificing the welfare of the
bank?
Is it time for you to see the farmers using a
different set of lenses?
Workshop 1
Regular Agricultural Lending
Policies & Practices
Group by bank
Supply information in Module 1 Workshop 1
handout
Discuss among your group mates answers
to the 3 questions in the handout.
Time: 45 minutes
Traditional Agricultural Lending
POLICIES
Loan
Purpose
Loan
Amount
Eligibility
Criteria
Collateral
Loan Term
Mode of
Payment
Interest
rates
Savings
TRADITIONAL AGRI LOAN
Traditional Agricultural Lending
Loan Analysis
Loan Approval
Loan
Disbursement
Follow up &
Collection
What percent
of your loan
portfolio is in
agri loan?