Lawmaker wants greater accessibility of credit to farmers

Salceda said the bill introduces missionary financial inclusion initiatives in rural communities to ensure that banking services are actually accessible to farmers. (Pexels Photo)

MANILA – A bill providing farmers, fisherfolk, and rural communities greater access to credit has been filed at the House of Representatives.

Albay Rep. Joey Salceda filed on January 23 House Bill 6039, which mandates banking institutions to strengthen the financing system for agriculture, fisheries, and rural development in the country. A copy of the bill was sent to reporters on Friday.

Salceda said the bill aims to enhance the Agri-Agra Reform Act of 2009 (Republic Act No. 10000), as well as a key reform to achieve the A-level credit rating the country is pursuing.

Salceda said the bill introduces missionary financial inclusion initiatives in rural communities to ensure that banking services are actually accessible to farmers.

Under the proposal, lending to programs or projects that seek to make financial services like virtual banking available at little or no cost to farmers can be considered in assessing a bank’s compliance with the Agri-Agra Reform Law.

“Agri-Agra requires banks to lend a certain portion of their portfolio to farmers and fisherfolk. Of course, it has not worked to the fullest because farmers aren’t banked in the first place. High-risk ang farmers for conventional banks,” Salceda said.

“Bukod diyan, malayo ang bangko sa bukid. Marami pang requirements kaya magpapabalik-balik ka. Siyempre, ‘yung iba, sa malapit na five-six na lang hihiram (Aside from that, banks are far away from farms. There are several requirements to fulfill, so they have to go back and forth to the bank. Of course, other farmers would just resort to 5-6 [lending scheme]),” he added.

The economist-lawmaker said physical banking would no longer be necessary with virtual applications that allow an individual to open a bank account through a cellphone and borrow from a Bangko Sentral ng Pilipinas (BSP)-registered bank.

“And because virtual banks operate at lower costs, mas mura ang loans na kayang ibigay (then the loans offered become cheaper),” he said.

He noted that virtual banking will grow even more accessible when the proposed Virtual Banking Act is passed

“Once that happens, my amendments to Agri-Agra will also help ensure that even farmers from remote communities can be included in the banking and lending system,” he said.

He said the Agri-Agra amendments are crucial, especially the provision on financial inclusion for rural communities, to help achieve the administration’s vision “that foresees the country’s emergence as a predominantly middle-class society.”