As part of the efforts to boost the Philippines’ agricultural production, the Philippine government should find a way to be able to tap into financial technology (FinTech) in linking farmers with financial services.
“If done well, FinTech could be key to increasing agricultural productivity because of its huge potential for financial inclusion by making financial services and products accessible even to the marginalized farmers and farming families,” Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA) Director Glenn B. Gregorio said.
Rico C. Ancog, University of the Philippines Los Baños (UPLB) Associate Professor and UP Scientist III who leads SEARCA’s Emerging Innovation for Growth program, said the use of modern financial technologies will likewise improve cost efficiency across the food supply chain in the country.
The SEARCA officials discussed this during a recent online forum on the potential of FinTech in advancing agricultural development in the Philippines.
The forum was jointly organized by SEARCA and SyCip Gorres Velayo & Co. (SGV).
During the forum, Land Bank of the Philippines (LANDBANK) President and CEO Cecilia Borromeo said about 2.67 million farmers benefitted from LANDBANK lending facilities that have collectively offered P237.62 billion worth of assistance to the agriculture sector to date.
LANDBANK’s lending programs to the agriculture sector use either its own funds through its regular lending window or in partnership with the Department of Agriculture (DA) or Department of Agrarian Reform (DAR).
Borromeo noted that clearly, access to agricultural financing plays a critical role in enabling the agriculture sector, including smallholder farmers and business enterprises, to adopt productivity-enhancing technologies and practices.
But, Christian Lauron, SGV Financial Services Consulting Partner and Government & Public Sector Leader, pointed out that agricultural transformation also requires farmers to shift from traditional agricultural payment systems to using available digital money services to reduce their financial risks.
Lauron added that a number of agri-FinTech startups in Asia are now offering support to smallholder farmers in accessing potential markets, affordable credit, capital for agricultural equipment, and other financial services.
To maximize these, he said there is a need to increase the awareness and knowledge of farmers on these kinds of platforms.
Among the FinTech startups to watch out for this year are farMart and Jai Kisan, both in India; Crowde and TaniHub, both in Indonesia; Impact Terra in Myanmar; and Cropital in the Philippines, said Lauron.
Cropital provides farmers access to scalable and sustainable farming and its development is supported by institutions in the United States, Netherlands, Malaysia, and the Philippines.
Right now, there is also an ongoing development of a digital agricultural platform that SEARCA and its partner APPGeese, Inc. are piloting with vegetables farmers in the municipalities of Nagcarlan and Liliw in Laguna and Dolores, Quezon.