Micro, small, and medium-sized agricultural producers, processors, and traders need access to a variety of financial services in order to maintain and grow their businesses. Among ASEAN Member States, small producers and agricultural enterprises often lack sufficient access to the financial services they need, or available services—often informal and unregulated—come with unfavorable terms. With more access to credit, small farms and enterprises could expand or become more productive, and thus earn more, improve their livelihoods, and increase the supply of food in their countries. And a stronger legal and institutional environment for credit could reduce risk to lenders and the cost of finance for agricultural enterprises, a cost ultimately reflected in food prices for consumers. Other financial services, such as insurance, can also promote agricultural lending and investment by reducing the risk to investors.
Last updated: April 23, 2014