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Department of Agriculture

Agricultural Credit Policy Council

Forum on Agricultural Microfinance:

The State of Practice

Plenary 3: Responses to Challenges in

Agricultural Microfinance

by Jocelyn Alma R. Badiola

Deputy Executive Director, ACPC
Spearheading Credit Reforms
Executive Order 113
The ACPC was established in 1986 to:
Synchronize all credit policies and programs in support of the
DA’s priority programs.
Review and evaluate the economic soundness of all ongoing
and proposed agricultural credit programs.
Approve all proposed agricultural credit programs prior to
submission to the approving or funding agency, whether
domestic or foreign.
Undertake measures to increase its funds base and adopt
other liquidity interest stabilization and risk cover mechanisms
for its various financing programs.
RA 7607, the Magna Carta for Small Farmers (1992):
Conduct institutional capacity building programs.
Develop special projects to promote innovative
financing schemes for small farmers.
Advocate rural and agricultural finance policies and
RA 8435, the Agriculture and Fisheries Modernization
Act (AFMA) of 1997
Oversee the implementation of the AMCFP
• Consolidation of directed credit program (DCP) funds
• Collection of past due loans; fund management
• Monitoring and evaluation of the program
Programs that support agricultural microfinance and
initiatives to manage risks in microfinance

Pilot-testing Innovative Financing Schemes

 The ACPC develops and pilot-tests innovative financing
schemes (IFS) that can minimize documentation and
collateral requirements to small farmers and fisherfolk that
need quick access to financing assistance.
 The IFS, addresses the peculiar requirements of
marginalized farmers and fisherfolk particularly those who
lack collateral and with no credit track record to give them
opportunity to be productive and acquire the necessary tools
for them to join the main credit stream, including the AMCFP
• IFS schemes are non-collateralized and household cash flow-
based credit scheme in areas pre-identified by ACPC and
• These are implemented through Countryside Financial
Institutions (CFIs) to ensure access to credit of target program
beneficiaries for farm diversification and off-farm/non-farm
• Overall, the IFS support the thrust of the DA in improving
the lot of non-collateralized or marginal small farmers and
fisherfolk by addressing the constraints in terms of their
access to credit.
Programs that support agricultural microfinance and
initiatives to manage risks in microfinance

Tapping the potentials of people’s organizations

• ACPC’s programs tap the awesome potentials of people’s

organizations as legitimate and efficient conduits of rural

• Cooperatives, cooperative banks, countryside financial

institutions including new, but potentially viable lending
conduits that are not currently accredited with the Land Bank
(such as NGOs, POs and farmers’ organizations including
irrigators’ associations) are currently utilized to undertake
agricultural microfinance operations.
Programs that support agricultural microfinance and
initiatives to manage risks in microfinance

Agricultural Guarantee Fund Pool (AGFP)

Created by Administrative Order No. 225 and 225-A signed by Pres.
Gloria Macapagal Arroyo encouraging financial institutions and
other credit conduits to lend to farmers by providing guarantee
cover to unsecured palay and food production loans extended to
All GOCCs and GFIs to allocate 5 % of their 2007 surplus for
projects in rice and food production, and as contribution to an
Agricultural Guarantee Fund Pool (AGFP).
The AGFP shall provide guarantee cover of up to 85 % of the loans
that will be extended by FIs to farmers engaged in production of
palay, corn, and other food crops.
Department of Agriculture
Agricultural Credit Policy Council

28/F One San Miguel Ave. Bldg., San Miguel

Ave. cor. Shaw Blvd., Ortigas Center, Pasig City
Contact us: (02) 634-3320-21, 636-3391-93
Fax No. (02) 634-3319, 636-3393
E-mail us: acpcinfo@yahoo.com
Website: www.acpc.gov.ph
Salamat Po!