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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
Q

NATURE OF AGRICULTURAL FINANCE

FINANCING AGRICULTURE or FINANCING OTHER SECTORS

ownership of land is difficult to verify as land records are not updated

A

FINANCING AGRICULTURE

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26
Q

NATURE OF AGRICULTURAL FINANCE

FINANCING AGRICULTURE or FINANCING OTHER SECTORS

sufficient infrastructure is available to implement their schemes

A

FINANCING OTHER SECTORS

27
Q

NATURE OF AGRICULTURAL FINANCE

FINANCING AGRICULTURE or FINANCING OTHER SECTORS

very short gestation period

A

FINANCING OTHER SECTORS

28
Q

NATURE OF AGRICULTURAL FINANCE

FINANCING AGRICULTURE or FINANCING OTHER SECTORS

monitoring is relatively easier and less time consuming

A

FINANCING OTHER SECTORS

29
Q

NATURE OF AGRICULTURAL FINANCE

FINANCING AGRICULTURE or FINANCING OTHER SECTORS

identification of ownership can be easily done by verifying records

A

FINANCING THE SECTORS

30
Q

NATURE OF AGRICULTURAL FINANCE

FINANCING AGRICULTURE or FINANCING OTHER SECTORS

entrepreneurs are not usually misled by external influence as they are well organized

A

FINANCING OTHER SECTORS

30
Q

NATURE OF AGRICULTURAL FINANCE

FINANCING AGRICULTURE or FINANCING OTHER SECTORS

long gestation period between investment and returns

A

FINANCING AGRICULTURE

31
Q

ISSUES AND CHALLENGES IN AGRI FINANCE

TRUE OR FALSE

higher bank density ratio can be found in region 3

A

FALSE

NCR accounts for higher bank density since concentrated ang banking facilities doon

32
Q

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

A

FALSE

switch Rural with Urban

33
Q

ISSUES AND CHALLENGES IN AGRIFIN

TRUE OR FALSE

high transac costs of small farmer loans discourage bank lending

A

TRUE (mas favorable pa sa banks mag-provide loans nang malakihan)

34
Q

ISSUES AND CHALLENGES IN AGRIFIN

informal moneylenders operate on a very limited supply of funds, that’s why it’s not???

A

IT IS NOT SUFFICIENT to service a large number of borrowers

35
Q

it explains why agri output has not increased despite cheap credit

A

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
Q

misutilization of loans leads to _______ farm output and income AND this negatively impacts the _______ to pay the loans

A

LOWER; ABILITY

37
Q

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

A

FALSE

efficiency—>inefficiency
decreased—>increased

38
Q

SUPPLY SIDE FACTORS RESULTING TO LOW AGRICULTURAL FINANCING

overly _______ loan provision requirements of CBP to ensure greater prudence made most banks _______ of agriculture sector

A

STRICT; WARY

39
Q

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

A

FALSE

strengthened—->weakened

(interest deregulation - large banks control pricing)

40
Q

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)

A

TRUE

41
Q

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

A

FALSE

should be greater—->should not be greater

42
Q

SUPPLY SIDE FACTORS RESULTING TO LOW AGRICULTURAL FINANCING

this promoted inefficiency fund allocations, prevented rural borrowers from venturing into other rural-based enterprises

A

CONTINUED IMPLEMENTATION OF DIRECTED CREDIT PROGRAMS

43
Q

DEMAND SIDE FACTORS RESULTING TO LOW AGRICULTURAL FINANCING

A
  1. lack of collateral value of land
  2. the poor credit rating of small farmers
  3. financial liberalization coupled with protectionist rural programs
44
Q

FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM

chief aims

A

boost agri prod and reduce poverty

45
Q

FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM

role of financial markets

A

help the poor and stimulate production

46
Q

DACP

view of users

A

beneficiaries; borrowers

47
Q

FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM

subsidies

A

heavily subsidy dependent

48
Q

FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM

sources of funds

A

vertical: gov’t and donors

49
Q

FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM

associated information systems

A

dense, fragmented, and vertical

50
Q

FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM

sustainability

A

largely ignored

51
Q

FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM

outreach

A

mostly ignored

52
Q

FEATURES OF DIRECTED AGRICULTURAL CREDIT PARADIGM

evaluations

A

credit impact on beneficiaries - mainly primary data

53
Q

REASONS FOR THE FAILURE OF THE DACP

A

-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
Q

FEATURES OF FINANCIAL SYSTEMS PARADIGM

chief aims

A

reduce market imperfections and transac costs for incom expans and poverty reduction

55
Q

FEATURES OF FINANCIAL SYSTEMS PARADIGM

role of financial markets

A

intermediate efficiently

56
Q

FEATURES OF FINANCIAL SYSTEMS PARADIGM

view of users

A

clients: borrowers and depositors

57
Q
A
58
Q

FEATURES OF FINANCIAL SYSTEMS PARADIGM

subsidies

A

increasingly independent of subsidies

59
Q

FEATURES OF FINANCIAL SYSTEMS PARADIGM

sources of funds

A

horizontal: primarily voluntary deposits

60
Q

FEATURES OF FINANCIAL SYSTEMS PARADIGM

associated info systems

A

less dens and mainly horizontal

61
Q

FEATURES OF FINANCIAL SYSTEMS PARADIGM

sustainability

A

major concern

62
Q

FEATURES OF FINANCIAL SYSTEMS PARADIGM

outreach

A

primary concern

63
Q

FEATURES OF FINANCIAL SYSTEMS PARADIGM

evaluation

A

performance of fin insti

AAE 130 (9 decks)

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