This paper provides a summary of the salient findings and recommendations of the AFMA-mandated review of mandates, programs, policies and performance of each of the government institutions involved in rural finance programs. Among the recommendations contained in the final report are: a) the restructuring/re-organization of government's rural finance institutions to make their delivery of financial services more coordinated and efficient; b) the careful alignment of incentives by government to encourage private sector participation by, among others, aggressively investing in building retail institutions that will deliver financial services to smallholders and aligning the interest rate for credit guarantee programs with market rates, taking into account the risks involved; and b) the maintenance by government of a dual-monitoring system, i.e., ACPC for impact on sector beneficiaries and BSP for the financial viability of institutions. The final report of the review was accepted by its Steering Committee, headed by the DOF, on March 2002. The report was, likewise, submitted to the Congressional Oversight Committee on Agriculture and Fisheries Modernization (COCAFAM), the DA Secretary and the Assistant Secretary for Policy and Planning, the House Committee on Economic Affairs as well as other members of Congress to advocate the translation of the review's recommendations into policies and legislation that could lead to the institutions' improved performance in terms of outreach.
