Opening Remarks 

IFAD-APRACA FinPower Forum-Consultation on Rural Financial Innovations and Emerging Issues 

Mr Luck Wajananawat, President, Bank for Agriculture and Agricultural Cooperatives (BAAC)
H.E. Mr Pal Buy Bonnang, Vice Chairman, APRACA and Assistant Governor, National Bank of Cambodia
Mr Man Ho So, Deputy Regional Representative, Food and Agriculture Organization (FAO), Regional Office, Bangkok
Mr Won-Sik Noh, APRACA Secretary General,
CEOs and Senior Officials of APRACA Member Institutions,

Representatives of international organizations,

Distinguished Participants,

It is my great honour to be invited to this important forum-consultation and to give opening remarks on behalf of the International Fund for Agricultural Development (IFAD) before this distinguished gathering of leaders of APRACA member institutions and other partner agencies. As many of you know, IFAD’s collaboration with APRACA dates back to the mid-1990s when with IFAD’s grant support, APRACA implemented the Microserv programme between 1996 and 2001. Under this programme, APRACA disseminated replicable rural finance models in selected countries of the region. An important lesson of this programme was that innovative models can be replicated easily when they are implemented through an organization with a wide geographic network such as APRACA, thereby yielding more cost-effective results, broader geographic reach, and assured project sustainability.

We resumed our collaboration in 2007 with the implementation of a five-year programme whose goal was to empowerment the rural poor through rural finance innovations. The objectives of this programme, called FinPower Programme include fostering an enabling, and pro-poor policy environment and regulatory framework for sustainable rural financial systems; encouraging innovative approaches to rural finance; and sharing information and lessons from projects and programmes to promote replication of successful approaches in the region. 

Between 20 August and 3 September of this year, IFAD had undertaken a review of the implementation of this programme through field visits and consultation with various stakeholders. This review found the overall achievements of this programme to be impressive. FinPower activities have contributed to greater knowledge sharing and policy dialogue among APRACA member institutions in rural and microfinance. Also, a number of innovative approaches and products were introduced in development projects through exposure visits, pilot testing and technical support. However, this review has also offered a number of recommendations to strengthen the implementation of innovative approaches, documentation and dissemination of generated knowledge, and promotion of partnerships beyond APRACA member institutions. Finally, this review recommended that the gains of this programme should be consolidated and mutual collaboration further expanded with a view to addressing emerging issues in rural and microfinance in Asia and the Pacific region.

The topic of this forum-consultation is very timely and important for several reasons. First, after many years to neglect, agriculture is back on the international agenda, thanks to the recent food crisis. This will imply, hopefully that rural and agricultural finance will receive increased attention among policy makers and leaders of financial institutions. Second, microfinance has recently come under deep scrutiny with some studies questioning the impact of microfinance in terms of poverty reduction, promotion of gender equality, and reduction in child mortality. This has led to an emerging perception that microfinance is oversold. Third, the financial crisis which started in 2008 has led to the contraction of credit and risk aversion of investors, which will put pressure on the flow of funds to rural areas. However, the crisis can also be seen as an opportunity to design new products and to institute better risk management strategies. I hope that this forum will provide a unique opportunity to discuss emerging issues in rural/microfinance and to share experiences in rural financial innovations.    

I am very happy that a number of partner organizations such as AFRACA, AFD, FAO, ESCAP, ICA, and FFTC have joined us today. I am also glad to see some IFAD colleagues and staff from IFAD supported investment projects in China, Cambodia and the Philippines, who are here to share their experiences and also to learn from others. I would also like to welcome Dr. Geetha Nagarajan of the University of Maryland, an internationally known rural finance expert who will make a presentation later this morning. I am confident that this forum/consultation will provide a unique opportunity for mutual learning and knowledge sharing.

Last but not the least, I would like to express my sincere appreciation to BAAC for kindly hosting this important forum/consultation and to the APRACA Secretariat for the logistical support. I wish the forum/consultation a great success.  

Thank you very much for your attention.