Microfinance program provides easy loans to farmers, fishermen

Inadequate capital is a common constraint among small-scale farmers and fisherfolk. Monetary problems also limit their households to pursue other livelihood activities that could augment the family income.

To address these financing needs, the Agricultural Credit Policy Council (ACPC), through the People’s Credit and Finance Corp., implemented the Agricultural Microfinance Program (AMP) for Small Farmers and Fisherfolk and their Households.

Since 2009, the program has provided credit funds to qualified borrower organizations for re-lending to small farmers and fisherfolk households and organizations.

After almost five years of program implementation, the ACPC commissioned the Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development of the Department of Development of the Department of Science and Technology (DOST-PCAARRD) for an impact assessment study to determine the program’s contribution in improving credit access as well as the quality of life of intended beneficiaries.

An assessment of lending policies and practices revealed that the microfinance institutions which retailed credit funds to farmers and fisherfolk employed simple access procedures which did not only make the funds easily available, but also encouraged the build-up of savings among borrowers.

With improved credit access, the study found that the AMP enabled rural households to explore new income- generating opportunities, thereby increasing household income.

Based on identified program features that influenced success as well as areas that require improvement, the PCAARRD team also provided insights and recommendations on how to further improve the delivery of microfinance services to the agricultural sector.