APRACA Regional Forum on Strengthening the Resilience of Smallholder Farmers through Rural Financial Innovations Hosted by the National Bank of Cambodia 30 May-1 June 2012, Siem Reap, Cambodia Remarks by Ganesh Thapa H.E. Mr Chea Chanto, Governor, National Bank of Cambodia Mr Luck Wajananawat, President, Bank for Agriculture and Agricultural Cooperatives (BAAC) Mr Ilyos Amanov,
APRACA Regional Forum on
Strengthening the Resilience of Smallholder Farmers through Rural Financial Innovations
Hosted by the National Bank of Cambodia
30 May-1 June 2012, Siem Reap, Cambodia
H.E. Mr Chea Chanto, Governor, National Bank of Cambodia
Mr Luck Wajananawat, President, Bank for Agriculture and Agricultural Cooperatives (BAAC)
Mr Ilyos Amanov, Representative of APRACA Chairman and Deputy Chairman of the Board, Agro-Bank of Uzbekistan
H.E. Pal Buy Bonnang, Assistant Governor, National Bank of Cambodia and APRACA Vice Chairman
Mr Won-Sik Noh, APRACA Secretary General,
CEOs and Representatives of APRACA Member Institutions,
Representatives of international organizations,
It is my great pleasure to be invited to this important forum and to be able to make a few observations before this august gathering of leaders of APRACA member institutions and other organizations. We are meeting here today to discuss the challenges faced by smallholders and other rural poor in enhancing their access to financial services so that they can increase their incomes and improve livelihoods.
Many challenges related to access to financial services in rural areas, costs and risk mitigation still exist. In recent years rural financial systems have faced additional challenges due to rising food and fuel prices, global financial crisis, and the effects of natural disasters. The rural financial systems in the region including rural microfinance have been shown to be unable to fully meet these challenges. Although many countries in the region were less affected by the effects of financial crisis, some countries experienced very high growth among microfinance institutions, over-indebtedness, and high rates of default and farmer suicides. This triggered interventions by governments to cap interest rates and regulate the rural and microfinance providers.
However, these crises should also be seen as an opportunity to design new financial products and to institute better risk management strategies. I hope that this forum will provide a unique opportunity to discuss these issues and to share experiences in rural financial innovations. There is a wealth of knowledge and experience among APRACA member institutions represented here and we all should benefit from this. Following the recommendation of the FinPower evaluation, APRACA Secretariat and IFAD are now working to develop a proposal for a follow-up phase of FinPower programme with potential grant funding from IFAD and hopefully other partners.
The topic of this forum is very timely and important for several reasons. After many years of neglect, agriculture is back on the international as well as national agenda, thanks to the food price crisis of 2008 and 2010. It is hoped that rural and agricultural finance will receive increased attention among policy makers and leaders of financial institutions. Efforts are underway in many countries to develop and use new financial products and services, particularly through the use of information and communication technologies, value chains, and micro-insurance to provide cost-effective and sustainable financial services in rural areas. As a result, new opportunities are emerging to deal with existing and emerging rural finance challenges. I am confident that this forum will provide a unique opportunity for mutual learning and knowledge sharing.
APRACA has been an important partner of IFAD for many years in promoting rural and microfinance development in Asia and the Pacific with the objectives of achieving more cost-effective results, broader geographic and inclusive coverage, and institutional sustainability.
We recently completed the implementation of a five-year programme, called the FinPower Programme, whose goal was to empower the rural poor through rural finance innovations. The objectives of this programme included 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. The evaluation of this programme found its overall achievements to be impressive. FinPower activities 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.
This evaluation also made a number of suggestions to promote innovative approaches, disseminate lessons learned, and promote partnerships beyond APRACA member institutions. It recommended that the gains of this programme should be consolidated and mutual collaboration further expanded with a view to addressing existing and emerging issues in rural and microfinance in Asia and the Pacific region.
I would like to express my sincere appreciation to the National Bank of Cambodia for hosting this important forum in this beautiful city of Siem Reap. Thanks are also due to the APRACA Secretariat team for its role in organizing this event. I wish the forum a great success.
Thank you very much for your kind attention.