FinTQ’s new program to extend cheap loans for farmers, fisher folk

Small farmers and fisher folk will soon have easier access to affordable financing to help increase their productivity as well as expand their connections to markets with FinTQ’s  Accelerated Growth and Rural Inclusion (AGRI) platform.

FinTQ managing director Lito Villanueva says AGRI will serve as an alternative channel for agriculture workers to source funds from Lendr partner banks and financial institutions

This is the latest feature of KasamaKA, a grassroots-based, bottom-up, and multi-sectoral social advocacy program for inclusive growth in support of the government’s National Strategy for Financial Inclusion.

AGRI is an end-to-end farm-to-marketplace digital agricultural value chain platform connecting producers to consumers for optimized productivity and greater efficiencies. It includes digital financial services through the Lendr platform, digital commerce through a marketplace, and cost-effective logistics infrastructure management in partnership with Metropac Movers.

The combined program and platform is being introduced nationwide in collaboration with the Bangko Sentral ng Pilipinas (BSP), the Department of Agriculture, various local government unit associations such as the League of Provinces of the Philippines and Liga ng mga Barangay sa Pilipinas, and industry partners such as the Rural Bankers Association of the Philippines (RBAP).

“The agricultural sector is vital to our nation’s development as it sustains the requirements of our growing population. It likewise needs to be well-funded to make it globally competitive and resilient against climate-related risks, especially in the Philippines which is highly exposed to various weather-related hazards,” said Lito Villanueva, FinTQ managing director and KasamaKA founder and lead convenor.

He noted that the AGRI platform will be an intervention to help reduce poverty in the countryside and boost shared prosperity at the bottom of the pyramid. FinTQ intends to initially implement AGRI in eight pilot areas with supportive local government partners, mostly in Mindanao.

BSP Governor Nestor A. Espenilla, Jr. reaffirms KasamaKA’s thrust to empower the agriculture sector, saying: “Innovations enabled by digital technology and value chain approach can not only make agri-financing more viable but also unlock new opportunities for rural banks and cooperatives to deliver a whole range of financial services catering to the unique needs of farmers and their communities.”

For his part, DA secretary Emmanuel Pinol said: “We always look for ways to further capacitate our small farmers and fishers by providing more access to affordable financing and leveraging on technology.”

Meanwhile, RBAP president Giovanni Gabriento said: “Rural bankers welcome innovative digital initiatives like this as part of our capacity-building measures to enhance our banking services and expand our reach through technology. We are committed to embracing digital transformation in support of the BSP’s thrust towards financial inclusion.”

Villanueva further notes that financing in the agriculture sector has always been a challenge both for lenders and borrowers.

“Farmers and fisherfolk are still deemed as high risk borrowers of banks, but with the intervention of the AGRI platform, which covers end-to-end of the agri-value chain, this will level the playing field. AGRI will serve as an alternative channel for agriculture workers to source funds from Lendr partner banks and financial institutions,” he said.

Aside from providing alternative credit options, AGRI will help small farmers earn higher income for their families while reducing costs to the end consumers as it will cut down the unnecessary middlemen with direct farm to business and consumer approach. It will stimulate optimized productivity as it boosts rural economy and harness trade.

The platform will also include enhanced capacity building program with sustained training, education, and values formation which would include marketing and sales modules. A partnership with a global standards certifying agency will also be part of the initiative to make Philippine produce globally competitive as well.

AGRI forms part of FinTQ’s thrust in promoting and increasing inclusive digital finance in the country.

FinTQ, the financial technology arm of Voyager Innovations, has been deploying various platforms to extend access to financial products and services to the unbanked and underserved segment. It currently has Lendr — a digital lending platform — that provides access to credit to Filipinos.

Lendr has the most extensive digital footprint covering all 81 provinces. The 20 poorest provinces currently account for almost 11% and 12% of loan transactions and of loan volume, respectively. Seven out of 10 Lendr borrowers were from the provinces, making it the only digital lending platform pervasive in rural areas.

On top of the traditional salary, personal, home, and auto loan products, it offers mobile crop loan, medicine loan, mSME loan, loan for overseas Filipinos and seafarers, and truck and equipment loan, among others. It provides borrowers a much reduced interest rate of 0.75% a month from the usual 30% from loan sharks.

In particular, for the agriculture sector, Lendr’s Mobile Crop Loan product with Producers Bank has already helped released close to P250 million in loans to over 1,000 small farmers initially in Nueva Ecija in one planting cycle. This is being expanded to other parts of the country with other Lendr partners.

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