Sustainable Value Chain Financing for Smallholder Agricultural Production in the Philippines

Abstract

In recent years, the government has intensified its lending programs to help the country’s agricultural sector, particularly smallholders, in accessing retail lending. However, the lack of markets and low prices have had significant implications on the repayment capacity and credit rating of small farmers and fisherfolk in the Philippines. Indeed, lending programs are unlikely to become successful if financing and production are not viewed in the bigger context of value chain financing. This paper looks into the current financing ecosystem of farmers and fisherfolk and provides recommendations on how the existing value chain financing can be made more inclusive and sustainable.