Merlyne M. Paunlagui

Enhancing Credit Delivery Facilities to Support Farmer’s Use of Technology

An important factor in increasing agricultural productivity and production in developing countries is through the use of modern technology. However, the use of modern technology like biotechnology products is capital intensive. This chapter presents how the informal credit providers enable the small corn farmers to use genetically modified (GM) corn varieties, the credit delivery mechanisms of both formal and informal credit providers, and how effective are the credit policy reforms in improving corn farmers’ access to credit. The study shows that majority of the corn farmers interviewed rely heavily on informal credit sources for corn production and consumption. These credit providers require no collateral but take into consideration the borrower’s credit record and capacity to pay, require farmers to use GM corn seeds, and charge higher interest rate. This chapter concludes with policy recommendations to regulate the terms and conditions of informal credit system and extend microfinance service to farmers to enable them to maximize benefits of modern technology adoption.