Summarize for literature review
Cognizant of the value and contribution as well of the challenges in the agricultural finance, the 
government has intensified its lending programs that are designed to help the agricultural sector, 
specifically, the smallholders. Thus, affordable and easy access retail lending has intensified in recent 
years. Despite these efforts, significant problems remain. These include the lack of markets and low 
prices, which have significant implications on the SFF’s overall repayment capacity and credit rating.
Indeed, these lending programs are unlikely to become successful if financing and production are not
viewed in the bigger context of a value chain financing. While AVCF is specific to crops and may differ 
depending on the available players and resources in communities, the government can set-up the 
elements necessary for the development of an AVCF that is sustainable and independent of government 
subsidies in the long-run. This implies that government credit programs have to be strategic and targeted 
and should be designed not just to give access to credit but to capacitate the SFF, farmers’ organizations
and cooperatives towards the establishment of AVCFs. Banks and other financial institutions have the 
funds to supply credit to the agricultural sector and to the SFF. The reduction of uncertainties in small 
farm production is imperative for these funds to flow, however.
In the short-run, a facilitator-driven AVCF is recommended to pave the way for an inclusive AVCF. 
Several critical elements are highlighted. These include 1) the capacity-building and reshaping mindsets 
among the SFF and the key role of associations in mobilizing the SFF to actively participate in government-led consultation and training, 2) the adoption of technology, 3) the improvement in risk-
mitigating measures such as the development of savings habit among the SFF and the development of 
innovative agricultural insurance, 4) the strengthening of links between agro-input suppliers and 
financial institutions, 5) the participation of banks and conduits in forging SFF links with markets, and 
6) the establishment of a credit information bureau for rural credit. In the medium-run, the government 
can focus on 1) the improvement in connectivity and 2) the establishment of physical infrastructures 
such as post-harvest facilities and processing hubs. 
In the long-run, the facilitator-driven AVCF has to evolve into an integrated AVCF with SFF 
associations, and even financial institutions, being closely linked to facilitate the various activities of 
the value chain. The SFF and their associations should be able to strengthen the linkages set out by the 
facilitator-driven AVCF and to come up with innovative AVCF strategies to forge new linkages. 
Information systems should be in place to enable the linking of financing instruments with financial 
institutions and to facilitate seamless transactions between and among the chains. 
Given that the value chain in the country is still traditional and it takes time to set-up the requisites of 
successful AVCFs (e.g. capacitating the SFF, associations, and small cooperatives; conduits to link the 
SFF with input and output markets; forging linkages with institutional buyers), the buyer-driven AVCF 
can be explored as a second-best alternative in the long-run. This AVCF is a scaled down version of the 
integrated AVCF in terms of markets although systems that facilitate the flow of information and the 
interlinking of financial instruments with financial institutions remain essential.