The entrepreneurial spirit of Filipino microfinance clients couldn’t be any more evident in Mrs. Lorna Espura, who operates a two-hectare vegetable farm in the beautiful fields of Cantilan, Surigao del Sur. A dedicated client of Cantilan Bank, Lorna is currently on her eighth loan of about P20,000 (approximately $440) payable within 6 months.
Since 1992, Lorna has been raising vegetables such as string beans, pipino (cucumber) and okra. During the harvesting months of July to December, she realizes revenue from harvesting them every other day.
Aside from this, she also harvests rice, fattens hogs and raises native chicken, but mainly for her family’s consumption. As if they weren’t enough, she and her family also operate a sari-sari store in their town.
And so, for managing a household with multiple and regular sources of income, Lorna becomes an ideal client for Cantilan Bank’s micro-agri loan product (MAP) designed in collaboration with the MABS Program.
Cantilan Bank’s micro agri loan is different from traditional agricultural loans that require only a lump sum repayment due at the time of harvest. She pays 60% of the principal amount in monthly installments, and the other 40% in a lump sum payment at the end of the repayment period. Because of her family’s various sources of revenue, this repayment plan is more suitable for her situation as opposed to her previous lump sum loans.
The agricultural microfinance products that MABS develops with its participating rural banks fill the void in formal agricultural financing for farmers like Lorna. Cantilan Bank and other banks in the countryside are best equipped to provide these types of financing needs for farmers.
Since it was pilot tested in 2004, MABS’ micro agri loan product is now being offered by 18 rural banks with more than 58 branches all over the country. Over 43,000 loans totaling more than PhP 583 million (about $ 13M) have been disbursed to small farmers in the Philippine countryside. And the stats are still growing. It’s such an amazingly profitable product that can really help the many small farmers in a vastly agricultural country like the Philippines. No wonder other countries are trying to learn from our experiences!
Until next time, Mabuhay ang Agricultural Microfinance!