The purpose of this note is to providepolicy recommendations to improve access to credit of ruralpopulations and small agricultural producers underfinancially sustainable schemes. Although the agriculturalsector remains an important source of employment,agricultural credit is a small fraction of commercial creditin Colombia. The share of agricultural credit in Colombia isbelow levels observed in other countries in the region.Colombian commercial banks have limited credit volume inrural areas, concentrating their lending activities on moreprofitable urban populations. General deposit warehouses andthe agricultural commodity exchange (Bolsa Mercantil deColombia (BMC)) provide funding for agricultural activities,but they are underdeveloped compared to regional peers andserve medium and large size producers. Overall use ofmobile- and internet-based payment financial productsremains low in rural Colombia. According to 2014 Findexsurvey data, just two percent of adults report using mobilebanking, defined as a mobile platform for makingtransactions from an account at a financial institution.Public credit guarantee system (FAG) coverage should bemodified to incentive the use of mobile guarantees andagricultural insurance. This will ensure that financialinstitutions have only covered tail risks, providingincentives to use mobile guarantees.
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