Joey A. Bermudez Chairman, Maybridge Financial Group Managing Risks in Rural Finance A Value Chain Perspective
The ultimate risks in rural finance are the risks that: (a) exposures may not be recovered and/or (b) exposures may not be properly priced. Both events will render the lending activity unprofitable in the short run and unsustainable in the long run.
The risks in rural finance will be unwieldy as long as value chains are weak.
A value chain is only as strong as its weakest link.
A value chain can be enhanced or damaged by the external environment.
Value chain financing requires a healthy risk appetite supported by the required skills set and a robust infrastructure
Manageable Risks in Rural Finance Strong Value Chains Failed value chains “actualize” risks Credit enhancements and maverick structures are myopic solutions. Weak value chains turn off supply. The truth and nothing but the truth