Improving the tools of cash flow-based lending methodology

In October 2021, the STEP’s products and services component focused on improving the cash flow-based lending methodology tools for PCFs.

The loan appraisal form has been fine-tuned. Now credit officers can print it out for data collection on the field. In addition, economic efficiency calculations of 30 livestock and crop production models were integrated into the loan appraisal form. It will support credit officers in calculating cash flow and assessing the repayment capacity of loan applicants.

The technical guidelines describe technical indicators, cost and benefit calculations, and related risks of specific agricultural production activities such as raising pigs, cows, chickens, ducks, shrimps, and cultivating rice. The standardized agricultural factsheets are designed to support loan officers in appraising loan applications for farming productions. Therefore, the PCFs can provide loans to the farmer while minimizing credit risk.

STEP also is going to develop more training materials for PCFs on the e-learning platform. It will help and encourage PCFs to use the tools effectively.