MABS APPROACH TO AGRICULTURAL MICROFINANCE Module 1, Session 1 Designing a Micro-Agri Product: Understanding Present Agricultural Lending

Introduction  UNDERSTAND the country’s agricultural sector  KNOW the farming situation in your service areas and farmers’ credit needs  Doing so will allow you to design a product appropriate to the farmers’ situation.

Session Objective By the end of the session, the participant will be able to: Write the policies and procedures of the of present lending product for the agriculture sector; Openly discuss whether present products have been effective in reaching the farmers?

Agricultural Sector in the Philippines* The Philippines is still a predominantly agricultural country. –Agriculture and fishery sector is at least 15% of the GDP. –One-third of the labor force is in agriculture. 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. */Data as of 2002.

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 thousand farmers.

Is your bank able to effectively reaching out to this market? Is your agricultural loan product addressing the need/s of the farmers in your area while managing the risks to protect the bank? What are the gaps between what your bank supplies and what most farmers in your service areas need? Do you think it is time to see the farmers with a different set of lenses?

Workshop 1 Regular Agricultural Lending Policies & Practice  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

Thank You!