Microfinance industry seen playing key role in ASEAN integration

  • 15 January 2015, Thursday

Source: Yahoo! News Philippines
14 Jan 2015

The microfinance industry can help farmers across Association of Southeast Asian Nations (ASEAN) countries cope with the financial challenges that will be brought about by the ASEAN integration starting this year.

ASEAN Economic Community (AEC) involves an established common market among some of the ASEAN countries, including the Philippines, while the micro finance sector, which is composed of several micro finance institutions (MFIs), provides financial services for entrepreneurs and small businesses lacking access to banking and related services like the farmers.

During the 2nd International Conference on Agricultural and Rural Development in Southeast Asia (ARD2014), representatives from Philippines, Laos, and Cambodia all agree that MFIs can help small farmers cope with the challenges from the AEC where tariffs for various products will be lowered or eliminated to give way to free trade within the region.

“With the Asean integration and the readiness of countries in question, MFIs can link farmers to institutions that provide agricultural information and technology, and develop and strengthen education programs from farm inputs to farm management,” Jaime Aristotle Alip, representative of the Philippines during ARD2014, said.

Held in Manila, the forum was led by the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA).

Globally, microfinance is growing in terms of outreach and loan portfolio.

“Asian MFIs have remained strong through the years and have provided agricultural microfinance to its clients, realizing its importance to poverty eradication,” Alip, who is also the founder and managing director of the Center for Agriculture and Rural Development-Mutually Reinforcing Institutions (CARD-MRI), said.

He said that microfinance can be successful if it is implemented with other types of programs.

The Department of Agriculture (DA) has earlier come up with a roadmap to prepare the agribusiness sector of the country for the AEC, which involves different funding schemes, development programs, and branding efforts.

For his part, Somphone Sisenglath, representative of Laos in the forum, said as a highly-agricultural country, formal microfinance providers play a vital role in their country’s agriculture sector.