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AAE 130 > UNIT I: Intro to Agricultural Finance > Flashcards

UNIT I: Intro to Agricultural Finance Flashcards

1
Q

the art and science of managing money

A

FINANCE

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2
Q

concerned with the process, institutions, markets, and instruments

A

FINANCE

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3
Q

TRUE OR FALSE

finance as a field is limited to dealing with money or cash

A

FALSE

since it considers wide array of financial services in a financial system

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4
Q

are of fin concerned with design and delivery of advice and fin products to clients/customers

A

FINANCIAL SERVICES

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5
Q

fin services constitute what 2 types of products?

A

TANGIBLE (money, goods used as payment)
INTANGIBLE (fin advice, services like online payments, and money tranfers)

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6
Q

study of mgt and provision of fin resources to the agriculture sector (crops, livestock, agri products and services, etc.)

A

AGRICULTURAL FINANCE

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7
Q

pertains to the array of financial services (i.e., agricultural credit, insurance, saving, and guarantee) provided and utilized in the sector

A

AGRICULTURAL FINANCE

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8
Q

used to finance agriculture-related activities such as input supply, production, distribution, wholesale, processing, and marketing

A

AGRICULTURAL FINANCE

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9
Q

the ability of an individual to obtain goods, services, or money at the present time in exchange for a promise to pay at a definite future time

A

CREDIT

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10
Q

also refers to loans granted by financial institutions to borrowers who pay credit in the form of goods, services, or money

A

CREDIT

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11
Q

IN ACCOUNTING, it pertains to the entry in an account that increases the liability, revenue, or equity accounts and decreases asset or expense accounts

A

CREDIT

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12
Q

cash loans extended by financial institutions (formal or informal, individuals or groups) to the different actors in the agri-food supply chains

A

AGRICULTURAL CREDIT

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13
Q

TRUE OR FALSE

agcredit may only be availed through cash

A

FALSE

it may be cash or in-kind

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14
Q

examples of in-kind agcredit

A

MATERIAL INPUTS (lent by agri-supply stores, middlemen, and other input suppliers to the producers, and the manual labor paid
using a portion of the harvest)

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15
Q

THE AGRICULTURAL SUPPLY CHAIN

A

suppliers—->farming—->
processing—->distribution—->
retail—->consumer

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16
Q

example of agricultural credit

A

Kapital Access for Young Agripreneurs (KAYA)
Agri-Negosya Loan Program
Sikat Saka
Agrarian Production Credit Program (APCP)

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17
Q

encompasses the range of financial services offered and used in rural areas by people of all income levels.

A

RURAL FINANCE

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18
Q

as a field of work, it enables access to farmers and all related enterprises to efficient and sustainable financial services which can promote agricultural and economic development

A

RURAL FINANCE

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19
Q

are all transactions in rural finance agricultural?

A

no. there are non- agricultural enterprises that operate in rural economies, and their need for financial services is provided through rural financing, and not agricultural financing

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20
Q

is agricultural finance merely a subset of
rural finance?

A

no. while a large part of agricultural finance is a subset of rural finance since agricultural activities predominantly occur in rural areas, there is still a portion of agricultural finance that is outside the subset of rural finance (i.e., urban farming/agriculture and food processing and manufacturing situated in urban areas).

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21
Q

range of financial services offered to and utilized by individuals or groups who belong to the low-income level in both rural and urban areas

A

MICROFINANCE

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22
Q

examples of products and services in MICROFINANCE

A

micro-deposits, micro-insurance, micro-enterprise loan plus, housing microfinance loans, micro-agri loans

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23
Q

“helping the poor help themselves”

TAGLINE OF WHICH TYPE OF FINANCE

A

MICROFINANCE

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24
Q

NATURE OF AGRICULTURAL FINANCE

FINANCING AGRICULTURE or FINANCING OTHER SECTORS

A

generally, risk and uncertainties involved in an enterprise can be foreseen and managed

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25
NATURE OF AGRICULTURAL FINANCE FINANCING AGRICULTURE or FINANCING OTHER SECTORS ownership of land is difficult to verify as land records are not updated
FINANCING AGRICULTURE
26
NATURE OF AGRICULTURAL FINANCE FINANCING AGRICULTURE or FINANCING OTHER SECTORS sufficient infrastructure is available to implement their schemes
FINANCING OTHER SECTORS
27
NATURE OF AGRICULTURAL FINANCE FINANCING AGRICULTURE or FINANCING OTHER SECTORS very short gestation period
FINANCING OTHER SECTORS
28
NATURE OF AGRICULTURAL FINANCE FINANCING AGRICULTURE or FINANCING OTHER SECTORS monitoring is relatively easier and less time consuming
FINANCING OTHER SECTORS
29
NATURE OF AGRICULTURAL FINANCE FINANCING AGRICULTURE or FINANCING OTHER SECTORS identification of ownership can be easily done by verifying records
FINANCING THE SECTORS
30
NATURE OF AGRICULTURAL FINANCE FINANCING AGRICULTURE or FINANCING OTHER SECTORS entrepreneurs are not usually misled by external influence as they are well organized
FINANCING OTHER SECTORS
30
NATURE OF AGRICULTURAL FINANCE FINANCING AGRICULTURE or FINANCING OTHER SECTORS long gestation period between investment and returns
FINANCING AGRICULTURE
31
ISSUES AND CHALLENGES IN AGRI FINANCE TRUE OR FALSE higher bank density ratio can be found in region 3
FALSE NCR accounts for higher bank density since concentrated ang banking facilities doon
32
TRUE OR FALSE Rural clients outside NCR compete for access to bank credit and other servs with those urban areas, who predictably lag behind in access
FALSE switch Rural with Urban
33
ISSUES AND CHALLENGES IN AGRIFIN TRUE OR FALSE high transac costs of small farmer loans discourage bank lending
TRUE (mas favorable pa sa banks mag-provide loans nang malakihan)
34
ISSUES AND CHALLENGES IN AGRIFIN informal moneylenders operate on a very limited supply of funds, that's why it's not???
IT IS NOT SUFFICIENT to service a large number of borrowers
35
it explains why agri output has not increased despite cheap credit
FUNGIBILITY OF CREDIT (di naco-control ng rural fin insti kung saan talaga ginagamit yung loans and minsan nga ay hindi for the intended purpose)
36
misutilization of loans leads to _______ farm output and income AND this negatively impacts the _______ to pay the loans
LOWER; ABILITY
37
SUPPLY SIDE FACTORS RESULTING TO LOW AGRICULTURAL FINANCING TRUE OR FALSE agri and agra loan quota spawned efficiency in funds allocation and decreased banks' opp costs
FALSE efficiency--->inefficiency decreased--->increased
38
SUPPLY SIDE FACTORS RESULTING TO LOW AGRICULTURAL FINANCING overly _______ loan provision requirements of CBP to ensure greater prudence made most banks _______ of agriculture sector
STRICT; WARY
39
SUPPLY SIDE FACTORS RESULTING TO LOW AGRICULTURAL FINANCING TRUE OR FALSE reduction in the number of existing banks due to mergers strengthened the impact of interest deregulation
FALSE strengthened---->weakened (interest deregulation - large banks control pricing)
40
SUPPLY SIDE FACTORS RESULTING TO LOW AGRICULTURAL FINANCING TRUE OR FALSE banks shield away from extending small farmer loans and low-cost credit following the enactments of the Magna Carta for Small Farmers (RA 7607)
TRUE
41
SUPPLY SIDE FACTORS RESULTING TO LOW AGRICULTURAL FINANCING TRUE OR FALSE Magna Carta for Small Farmers (RA 7607) of 1992 states that interest rates for small farmer loans should be greater than 75% of prevailing commercial rates
FALSE should be greater---->should not be greater
42
SUPPLY SIDE FACTORS RESULTING TO LOW AGRICULTURAL FINANCING this promoted inefficiency fund allocations, prevented rural borrowers from venturing into other rural-based enterprises
CONTINUED IMPLEMENTATION OF DIRECTED CREDIT PROGRAMS
43
DEMAND SIDE FACTORS RESULTING TO LOW AGRICULTURAL FINANCING
1. lack of collateral value of land 2. the poor credit rating of small farmers 3. financial liberalization coupled with protectionist rural programs
44
FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM chief aims
boost agri prod and reduce poverty
45
FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM role of financial markets
help the poor and stimulate production
46
DACP view of users
beneficiaries; borrowers
47
FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM subsidies
heavily subsidy dependent
48
FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM sources of funds
vertical: gov't and donors
49
FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM associated information systems
dense, fragmented, and vertical
50
FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM sustainability
largely ignored
51
FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM outreach
mostly ignored
52
FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM evaluations
credit impact on beneficiaries - mainly primary data
53
REASONS FOR THE FAILURE OF THE DACP
-the emphasis on disbursing ag credit meant that the development of SUSTAINABLE FIN INST AND MARKET WAS NEGLECTED -perception of rural comms as TOO POOR TO SAVE, so efforts concentrated almost exclusively -development fin insti were often seen as GOVERNMENT DISBURSEMENT WINDOWS, resulting in a poor loan repayment culture
54
FEATURES OF FINANCIAL SYSTEMS PARADIGM chief aims
reduce market imperfections and transac costs for incom expans and poverty reduction
55
FEATURES OF FINANCIAL SYSTEMS PARADIGM role of financial markets
intermediate efficiently
56
FEATURES OF FINANCIAL SYSTEMS PARADIGM view of users
clients: borrowers and depositors
57
58
FEATURES OF FINANCIAL SYSTEMS PARADIGM subsidies
increasingly independent of subsidies
59
FEATURES OF FINANCIAL SYSTEMS PARADIGM sources of funds
horizontal: primarily voluntary deposits
60
FEATURES OF FINANCIAL SYSTEMS PARADIGM associated info systems
less dens and mainly horizontal
61
FEATURES OF FINANCIAL SYSTEMS PARADIGM sustainability
major concern
62
FEATURES OF FINANCIAL SYSTEMS PARADIGM outreach
primary concern
63
FEATURES OF FINANCIAL SYSTEMS PARADIGM evaluation
performance of fin insti

AAE 130 (9 decks)

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