RMB loan program boosts agri value chain
AS the world continues to rapidly transform, Filipino farmers are faced with evolving challenges in expanding their agribusinesses. One thing that they need to grow their livelihood is access to financing.
For this reason, the Yuchengcoled Rizal MicroBank (RMB) has stepped up its efforts to bring banking closer to the underbanked agricultural sector, among the most affected industries amid climate change challenges and the pandemic.
RMB designed AgriBiz Production Loan, which assesses the farmers’ capability to settle loans, offering them payment options during the assessment process. The bank then provides credit to individual farmers and farmer organizations that will allow them to strengthen their agribusiness.
The loan facility also assists them in applying for agricultural insurance from the Philippine Crop Insurance Corp. (PCIC), which guarantees that their farmlands are insured in case of natural calamities.
“A resilient agriculture value chain is crucial for the country not only in maintaining economic growth but also in ensuring Filipinos have adequate food on their plates. Gaps in the value chain, such as in financing, create new challenges, which may be more difficult to address later,” said Janice Javerle, Agriculture Value Chain Financing unit head of RMB.
One of the biggest challenges in farming is capital, according to corn farmer Bernardo Baylon. He was 17 years old when he started tending their 3-hectare family farm in Bukidnon alongside his father.
Since then, funds for fertilizers, pesticides, chemicals, technologies and other necessities have been a recurring issue.
With financial inclusion at the core, RMB has made it its mission to widen its reach and provide credit to farmers like Baylon.
Before RMB reached their town, Baylon recalled that farmers were intimidated to apply for a loan. With a lack of financial institutions to serve them, the farmers instead borrowed from the private sector despite high interest rates. Unfortunately, keeping up with loan payments made it tough for farmers to expand their production since they relied on their profits alone.
“We are making banking simpler for them — we try to speak their language to help eliminate their apprehension in going to financial institutions for help. This may be more difficult for us to get clients, but this is the most gratifying client-banker relationship. For the farmers, we are not just doing our jobs. They know that we believe in them,” Javerle said.
Four years after partnering with RMB, Baylon is proud to have extended his farmland to more than 7 hectares.
“What kept us from seeking help from banks before was that we had no collateral to show. We thought that since banks usually require a lot of documents for the application, they won’t approve our loan,” said Baylon.
“We are lucky that RMB came to us to offer an easy and hasslefree process. We were then able to expand our land and have had a sustainable agribusiness,” he added.