CEBU CITY – In light of the Bangko Sentral ng Pilipina’s (BSP) approval of micro-agri lending expansion recently, the Rural Bankers Association of the Philippines (RBAP)’s Microenterprise Access to Banking Services (MABS) Program is gearing up to support the extension of this product among all qualified RBAP member rural banks.

“We anticipate that more rural banks would be encouraged to offer agricultural microfinance products and services under the revised micro agri-lending regulations recently issued by the BSP,” said RBAP President Joseph Omar Andaya in an interview with Manila Bulletin.

Andaya added this would redound to having more farmers gain access to bank credits.

The RBAP-MABS program provides technical assistance and training to develop rural banks’ capacity to profitably offer microfinance products and services for microentrepreneurs, small farmers and low-income households.

While RBAP-MABS does not provide loan funds or guarantees, it supports savings mobilization and commercial sources of capital and investment to finance and support sustainable microfinance services.

According to the BSP website, borrowers of the micro-agri loans will enjoy the same benefits as microfinance loans, such as the exemption from the requirement of traditional collateral, complex documentary requirements and application procedures.

Micro-agri loans are in amounts not exceeding P150,000, and involve a short loan term and frequent amortizations based on the borrower’s capacity to pay as determined through household cash flow analysis, BSP explained.

Andaya said the loans are granted to borrowers who have engaged in farming for at least two years but have other non-farm income sources.

The application of microfinance principles to agricultural credit is a pilot project of the RBAP-MABS approved by the BSP Monetary Board on Jan. 19, 2006.

Since late 2004, when the RBAP-MABS Approach to micro agri-lending was first pilot tested and offered to MABS participating rural banks, where more than P500 million in micro agri- loans were disbursed to more than 17,000 farmers.

The RBAP-MABS program is open to all 650 member rural banks and with the support of its service providers, plans to open up and offer additional training to interested and qualified rural banks in 2010 to expand micro agricultural and other microfinance products and services.