ATTACHMENT_6.a_ASSESSMENT_OF_RURAL_AND_AGRICULTURAL_FINANCIAL_SERVICES_IN_COLOMBIA.pdf

VERSION PARA COMENTARIOS

August 2014

Assessment of Rural and Agricultural Finance and Financial Services in Colombia

FINAL ASSESMENT REPORT

Assessment of Rural and Agricultural Financial Services in Colombia

FINAL ASSESMENT REPORT

English Version

AUGUST 2014

BY:

UT ECONOMETRIA - MARULANDA CONSULTORES

DISCLAIMER:

The opinions expressed herein are of the authors alone and do not necessarily reflect the vision or opinion of the United States Agency for International Development.

INTRODUCTION 6

1 DEMAND 7

1.1 FARMERS AND RURAL BUSINESSES 7

1.1.1 CHARACTERISTICS OF FARMERS AND BUSINESSES 8

1.1.2 WHICH FINANCIAL SERVICES ARE ACCESSIBLE AND WHICH ARE USED? 13

1.1.3 POTENTIAL MARKET 26

2 HOUSEHOLDS 32

2.1 ACCESS HAS IMPROVED DUE TO BETTER FINANCIAL COVERAGE 32

2.2 SAVINGS 32

2.3 CREDIT 35

2.4 INSURANCE 37

2.5 MONEY ORDERS, TRANSFERS, AND PAYMENTS 40

3 SUPPLY OF FINANCIAL SERVICES IN THE RURAL AND AGRICULTURAL SECTOR 41

3.1 FOCUS AND TARGET MARKET 41

3.2 USAGE OF FINAGRO’S FINANCIAL SCHEMES 43

3.3 RISK MANAGEMENT STRUCTURES 45

3.4 RISK MITIGATION MECHANISMS 46

3.5 OTHER PRODUCTS EXPLORED IN LOCAL-LEVEL INTERVIEWS 47

3.6 GOVERNMENT PROGRAMS 48

3.7 VISION OF THE REAL SECTOR FUNDERS 49

3.7.1 AGRICULTURAL INPUT SUPPLIERS 49

3.7.2 FINANCING THROUGH AGRICULTURAL-PRODUCT PURCHASERS 50

3.7.3 INFORMAL CREDIT SUPPLIERS 51

4 CONCLUSIONS AND RECOMMENDATIONS 52

DEMAND FOR AND ACCESS TO FINANCIAL SERVICES 52

MAIN OBSTACLES FACED BY THE SUPPLY SIDE 54

RECOMMENDATIONS 54

TECHNICAL ASSISTANCE FOR AGRICULTURAL CREDIT 54

GUARANTEES 55

SUPPORT PUBLIC POLICY REFORMS 56

List of Tables Table 1. Respondents’ gender Table 2. Respondents’ age Table 3. Average number of employees Table 4. Asset ownership among farmers and businesses Table 5. Distribution of the value of assets by quintiles for farmers and businesses Table 6. Value of assets by type of financial presence Table 8. Possession of savings and checking accounts among farmers and businesses Table 9. Account tenure by financial presence and gender Table 10. Places used to save money by type of activity Table 11. Place used to save money by financial presence and gender Table 12. Farmers and businesses that sent or received money Table 13. Mechanisms used to send money Table 14. Current debt by gender Table 15. Current sources of debt Table 16. Sources of debt by presence of financial institutions Table 17. Access to formal credit by gender Table 18. Formal sources of credit Table 19. Possession of bank account and credit Table 20. Formality among those with access to credit Table 21. Access to formal credit by type of farming activity and type of crop Table 22. Access to formal credit by business activity Table 23. Commercial sources of credit Table 24. Informal sources of credit Table 25. Strategies employed when they needed money Table 26. Main credit amounts by source Table 27. Average value and conditions of the most important credit Table 28. Possession of insurance Table 29. Types of insurance held Table 30. Use of cellphones to make financial transactions Table 31. Savings market potential among farmers Table 32. Savings market potential among businesses Table 33. Market potential for transfers Table 34. Plans to make an investment in the next two years Table 35. Value of planned investments by quintile Table 36. Market potential for credit for agricultural investments Table 37. Rural population affected by an adverse shock Table 38. Shocks that caused significant losses during the last three years Table 39. Time needed to recover from adverse shock Table 40. Main mechanisms used to cope with adverse shock

List of Figures

Figure 1: Income by gender Figure 2: Possession of savings account by income quintile Figure 3: Access to formal credit by income quintile Figure 4: Access to formal credit by assets quintile Figure 5: Percentage of people who save (urban vs. rural) Figure 6: Where do urban and rural households save?

Figure 7: Percentage of households with at least one credit and with formal credit Figure 8: The use of credit by source………………………………………………………35 Figure 9: % of households with credit and average value Figure 10: Reasons for not having credit with the financial sector Figure 11: Percentage of households by type of insurance (urban vs. rural) Figure 12: Households who have suffered emergencies Figure 13: What did you do to cope with last emergency?

Figure 14: Reasons for not having insurance Figure 15: Channel used to receive remittances……… Figure 16: Cost of receiving money…………………

Introduction

This report presents the main results from a survey of farmers and businesses in rural municipalities in Colombia. The aim is to determine which financial services they currently have access to, the main characteristics of these services and the reasons why these actors use or avoid certain financial services. It also seeks to estimate the market potential of financial products based on the population’s expected use in the future.

In this report, “enterprise” or “business” is understood as an open-to-the public business located in the urban center of rural municipalities. “Farmer” is defined as an agricultural producer living up to one hour away (via public transportation) from the urban center of these municipalities.

The first section of this report presents a summary of the results from primary sources collected during the demand survey. This is complemented by the second section, which includes an analysis of secondary sources on access to and usage of financial services within rural households in Colombia.

The third section presents the results of interviews with the main financial institutions that finance the agricultural sector in Colombia, including banks, leasing companies, and microfinance nongovernmental organizations (NGOs), as well as interviews with agrochemical companies, input suppliers and agro-industrial companies that purchase farmers’ produce, with the aim of understanding the reality of financing schemes.

Interviewees included staff at national-level headquarters and representatives working at the local level. Informal moneylenders were also interviewed.

The last section presents conclusions regarding the main barriers to financing productive activities in rural Colombia and suggested measures for overcoming them.

1 Demand

To determine the situation regarding access to and usage of financial services in rural municipalities in Colombia, this section presents the results from the demand survey of farmers and rural businesses. The results are complemented with available information from secondary sources concerning rural households’ access to and usage of financial services.

1.1 Farmers and rural businesses

This section presents the main results from the demand survey of farmers and rural businesses carried out between May 27 and June 15, 2014.

The selection of the sample1 followed strict technical parameters to be able to perform the expansion to the chosen sampling frame. The sampling process was as follows: Of Colombia’s 1,102 municipalities, the 563 municipalities that fulfilled the rurality and security conditions were selected as the reference universe; the combined population of these municipalities was 7.5 million people. These municipalities were then grouped according to region and the presence of financial services in order to be able to select a random sample of 20 municipalities among the various groups.

In the field, blocks and dispersed rural settlements (in Spanish “veredas” ) from these municipalities were randomly selected and counted by scanning. Then, 528 businesses and 514 farmers were randomly selected for interviews, while ensuring that the selected respondent was either the head (of the business or farm) or someone who claimed to have a comprehensive understanding of the financial aspects of the productive activity.

The surveyed businesses represent all of the businesses in rural municipalities in Colombia with the same characteristics of the municipalities from the sample, while the farmers represent all of the farmers in rural municipalities living an hour away from the urban center. After applying the expansion factors, the results represent the situation of 48,000 farmers and 28,700 businesses in Colombia’s most rural municipalities. This means that in a population of 7.5 million people, there are 3.8 businesses and 10 farmers for every 1,000 inhabitants.

In the tables in this section, the standard errors are reported in parentheses.

1 See Annex 1.

1.1.1 Characteristics of farmers and businesses

In the livestock and agricultural sector, most farmers are men. In rural businesses, most entrepreneurs are women. As shown in the table below, 72% of the farmers are men, and 55% of the businesses are run by women.

Table 1. Respondents’ gender

Total Farmer Business

Male 61.8% 72.1% 44.6% (4.8%) (4.8%) (5.0%)

Female 38.2% 27.9% 55.4% (4.8%) (4.8%) (5.0%)

Total 100.0% 100.0% 100.0% Source: Econometría

From the sample, 94.6% do not belong to any ethnic group.

Farmers are older than business owners. As shown in the table below, 70% of farmers are over the age of 45, while only 51% of entrepreneurs are in this age range. Only 11% of farmers are aged 26–35 years, suggesting the possible migration of youth to the cities.

There are no significant gender differences.

Table 2. Respondents’ age

Total Type of activity Gender

Farmer Business Male Female 18–25 years 4.2% 1.1% 9.3% 1.9% 7.8%

(0.8%) (0.4%) (1.0%) (0.6%) (1.7%)

26–35 years 14.3% 11.0% 19.8% 10.9% 19.7% (1.5%) (2.5%) (1.8%) (2.2%) (1.8%)

36–45 years 17.1% 15.2% 20.2% 17.4% 16.5% (1.1%) (2.1%) (1.7%) (1.4%) (2.7%)

46–55 years 28.8% 30.0% 26.8% 28.4% 29.5% (1.5%) (1.5%) (2.3%) (1.3%) (3.0%)

56+ 35.6% 42.7% 23.8% 41.3% 26.5% (3.2%) (4.0%) (3.6%) (3.6%) (3.0%)

Total 100.0% 100.0% 100.0% 100.0% 100.0% Source: Econometría

Most farmers and entrepreneurs completed only primary school (54%). The educational level of business owners is significantly higher than that of farmers: 47.2% of entrepreneurs attended high school, compared to 20.3% of farmers. Women have significantly higher levels of education: almost 41% attended high school, compared to just 23.9% of men (see Table 2-1 in Annex 2).

On average, farmers have more employees than rural businesses. They also have higher numbers of workers from the same household.

Table 3. Average number of employees Total From same household From different households

Farmers

3.5 2.0 1.5

(0.4) (0.1) (0.4)

Business

1.9 1.6 0.4

(0.05) (0.04) (0.03) Source: Econometría

ASSETS

In terms of asset ownership, there are significant differences between rural businesses and farmers. With regard to land, 76% of farmers own the land where they produce, but only 34% of businesses own the location (shop or building) where the business operates. In terms of equipment and machinery, businesses have more assets than farmers do. With regard to housing, farmers’ housing is generally located inside the farm, while less than half of the entrepreneurs have their housing in the same location as the business.

Table 4. Asset ownership among farmers and businesses

Farmer Business

Housing in the same location as productive activity 70.7% (6.0%) 40.7% (3.6%)

Own cattle 22.6% (4.2%) N.A. N.A.

Own the land where you produce 75.6% (3.1%) N.A. N.A.

Own the location/ building of the business 33.7% (1.7%)

Of those whose housing is not in the same land as the productive activity, those who own a house

62.2% (7.7%) 62.2% (7.7%)

Owns work equipment 27.6% (6.8%) N.A. N.A.

Owns implements for the business 50.1% (2.2%)

Owns electronic appliances at home 89.5% (1.7%) 94.4% (1.1%)

Source: Econometría.

Farmers’ assets are concentrated in higher quintiles than businesses’, though the difference is not statistically significant. Regarding the reported value of their assets, 80% of farmers fall below the maximum level of assets defined by Finagro, and most businesses fall under the small category with less than two employees.

Adding up all of the assets of the interviewees as a proxy of the total wealth, the total value for farmers is COP39.5 billion, and the total value for businesses is COP27.1 billion.

Table 5. Distribution of the value of assets by quintiles for farmers and businesses

Assets by quintiles Farmer Business Total

<COP7.2 Mill 22.1% 16.3% 20.0% (3.1%) (1.9%) (1.7%)

COP7.2 < COP20.6 Mill 15.8% 20.7% 17.6% (1.8%) (2.2%) (0.9%)

COP20.6 < COP40.2_Mill 17.4% 25.2% 20.3% (2.8%) (4.2%) (2.7%)

COP40.2 < COP80.7_mill 24.0% 20.7% 22.8% (1.0%) (1.4%) (0.7%)

More than COP80.7 Mill 20.6% 17.1% 19.3% (4.4%) (3.7%) (3.5%)

Total 100.0% 100.0% 100.0%

Those municipalities with a greater presence of financial institutions have a higher concentration of assets in the highest quintiles compared to municipalities that have only bank agents (corresponsales bancarios). There highest concentration of wealth (in the form of assets) in the upper quintiles occurs in the Oriental and Central regions.

Table 6. Value of assets by type of financial presence

Bank agents only

Banco Agrario

Banco Agrario + others

Total

<COP7.2 Mill 28.1% 15.8% 24.5% 20.0% (5.0%) (1.2%) (2.2%) (1.7%)

COP7.2 < COP20.6 Mill 19.6% 15.9% 20.8% 17.6% (3.6%) (0.5%) (3.2%) (0.9%)

COP20.6 < COP40.2_Mill 24.3% 20.6% 15.7% 20.3% (3.2%) (4.3%) (1.4%) (2.7%)

COP40.2 < COP80.7_Mill 18.3% 26.2% 16.9% 22.8% (2.7%) (1.0%) (1.4%) (0.7%)

More than COP80.7 Mill 9.7% 21.5% 22.1% 19.3% (7.3%) (4.8%) (4.3%) (3.5%)

Total 100.0% 100.0% 100.0% 100.0% Source: Econometría

Table 1B. Value of assets per quintile by region Atlantic Central Oriental Pacific Total

<COP7.2 Mill 32.1% 17.6% 20.5% 10.3% 20.0% (0.7%) (2.4%) (3.7%) (2.9%) (1.7%)

COP7.2 < COP20.6 Mill 26.1% 14.6% 16.7% 16.1% 17.6%

(1.2%) (1.1%) (1.9%) (1.1%) (0.9%)

COP20.6 < COP40.2_Mill 11.2% 22.1% 18.0% 31.9% 20.3% (0.5%) (4.8%) (3.7%) (7.3%) (2.7%)

COP40.2 < COP80.7_Mill 17.9% 26.4% 21.9% 23.8% 22.8% (0.4%) (0.6%) (1.4%) (0.1%) (0.7%)

More than COP80.7 Mill 12.8% 19.3% 22.9% 17.8% 19.3% (2.1%) (4.2%) (6.8%) (9.0%) (3.5%)

Total 100.0% 100.0% 100.0% 100.0% 100.0% Source: Econometría

LEVELS OF FORMALITY AMONG PRODUCTIVE ACTIVITIES

Higher levels of formality were found among businesses compared to farmers. For example, 59.3% of businesses have a commercial register, 62.5% keep accounts and 21.2% have their employees affiliated to social security. In contrast, among farmers, only 3.2% have a commercial register, 29.6% keep accounts and 10.4% have their employees affiliated to social security.

Table 7. Formality of productive activity

Keep accounts 41.9% 29.6% 62.5% (2.0%) (3.1% (2.4%)

Commercial register 24.2% 3.2% 59.3% (2.2%) (1.4% (4.0%)

Workers affiliated to social security

14.4% 10.4% 21.2% (1.1%) (1.5%) (2.3%)

Source: Econometría

Most businesses are in the wholesale and retail sectors (75%), with a small portion in the services sector (13.7%). A vast majority of farmers undertake agricultural activities (81.9%) and almost half undertake livestock activities (44.8%), with some undertaking both. Of those undertaking agricultural activities, 51.4% have permanent crops and 29.2% have temporary crops (see Table 2-2 in 2).

ASSOCIATIONS AND PRICING FOR FARMERS

Almost half of farmers (46.6%) confirmed the existence of associations in their village or in nearby dispersed rural settlement. These associations offer technical assistance services as well as commercial and credit services. However, only 18% of farmers belong to an association; 38% sell their products to individual clients and 19% to associations or cooperatives.

The prices of agricultural products are determined by supply and demand in the specific market for these commodities. According to the majority of farmers, prices are determined at the moment of sale or are guided by the market. Only 1% said that prices are set before production.

INCOME AND EXPENSES

Income quintiles show differences based on gender, though not very significant.

Women’s income is concentrated in the lowest quintiles.

Figure 1: Income by gender

Although most of farmers’ and businesses’ income comes from their productive activity, they also receive other types of income. Fifty-four percent of farmers and 42% of businesses receive income from other sources. Only 13% of farmers and 9% of business owners receive a salary.

Among those who receive income from other sources, this income comes mainly from pensions and salaries. Subsidies are not a significant source of income for these households, which relates to the fact that the sample is not necessarily representative of people living in extreme poverty. Most farmers and businesses receive their alternative sources of income in cash, with the exception of subsidies from Familias en Acción, which are received via bank transfer.

An additional exercise allows for an approximation of the total monthly household income:

adding the monthly profit from productive activities and other sources of income, businesses earn an average of COP1 million per month, while farmers earn an average of COP2 million per month. These figures are consistent with other sources of information, such as the Colombian Longitudinal Survey of Wealth, Income, Labor and Land (ELCA)2, which shows an average monthly income of COP1.79 million among rural households in Colombia.

2 Los Andes University, 2013

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

< COP 260,000 Between COP 260,000 and COP

690,000

Between COP 690,000 and COP

1,500,000

Between COP 1,500,000 and

COP 3,500,000

> COP 3,500,000

Male Female

Among businesses, the most significant expenditure is on goods needed to supply the business; among farmers, it is on production inputs, followed by labor expenses. All of these represent working capital financing needs.

1.1.2 Which financial services are accessible and which are used?

SAVINGS

Results from the survey show that 52.7% of farmers and rural businesses have some type of bank account. The main savings product to which they have access is a savings account. In total, 51% of this population has a savings account, while only 3% has a checking account. However, rural businesses have greater access to accounts than farmers do, as detailed below.

Table 8. Possession of savings and checking accounts among farmers and businesses

Total Farmers Businesses

At least one type of bank account

52.7% 47.4% 61.6% (3.6%) (3.9%) (3.9%)

Checking account 3.0% 1.8% 5.0% (0.9%) (1.3%) (1.5%)

Savings account 51.0% 45.8% 59.8% (4.3%) (4.7%) (4.2%)

Source: Econometría

The highest percentage of farmers and businesses with at least one type of bank account is in municipalities that have a bank branch, whether Banco Agrario or another bank. This demonstrates that financial presence has an impact on the access to formal savings products. There are no significant differences according to gender.

Table 9. Account tenure by financial presence and gender

Type of financial presence Gender

Bank agents only

Banco Agrario

Banco Agrario + others

Male Female

At least one type of bank account

38.9% 56.0% 56.2% 53.5% 51.4% (7.8%) (5.2%) (5.7%) (4.0%) (5.0%)

Checking account 0.5% 4.2% 1.9% 3.8% 1.7% (0.3%) (1.4%) (0.8%) (1.3%) (1.0%)

Savings account 38.4% 53.6% 55.6% 51.0% 51.2% (7.5%) (6.6%) (5.5%) (5.0%) (5.0%)

Source: Econometría

Among income quintiles, there is greater access to formal savings as income increases.

This is true for both farmers and businesses. Access to savings is greater for businesses than farmers at all income levels.

Figure 2: Possession of savings account by income quintile

Farmers and businesses combine formal and informal savings and credit mechanisms, and they use surpluses to save and to pay debts. In terms of the use of cash surpluses as an approximation of savings’ use, the main uses (for both farmers and businesses) are home expenditures and business inputs. Paying debts is also an important use for surpluses, reported by 50% of farmers and businesses. Other frequent uses include buying electric appliances and assets for the business or home and investing in home improvements.

Business owners behave differently than farmers, spending more money on housing and less on improving their productive activity. Different behaviors exist among genders as well: women spend less on house improvement, buy fewer assets, and pay fewer debts (see Tables 2-3 and 2-4 in 2).

Thirty-eight percent of farmers and rural businesses save their surpluses, without significant differences between them. However, those who have a savings account do not use it to save, for the proportion of those who have a savings account is greater than those who save at the bank when they have money left. Most who save money do so at home (69.5%), while some use formal institutions like banks or cooperatives (41.1% of entrepreneurs compared with 29.4% of farmers). These findings contrast with those regarding access to savings accounts: the percentage of people with a savings account is higher than the percentage of those who actually use this account to save surpluses.

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

< COP

260,000

Between COP 260,000 and

COP 690,000

Between COP 690,000 and

COP

1,500,000

Between COP 1,500,000 and COP

3,500,000

More than

COP

3,500,000

Total

Farmer Business

Table 10. Places used to save money by type of activity.

Total Farmers Businesses

Home 69.5% 73.2% 62.9% (3.4%) (4.1%) (3.1%)

Bank or cooperative 33.6% 29.4% 41.1% (3.2%) (4.1%) (3.1%)

Informal savings group 9.3% 8.6% 10.4% (4.4%) (5.4%) (3.9%)

Source: Econometría

While most prefer to save cash at home, there is a difference among municipalities according to the type of presence of financial institutions. The use of informal saving mechanisms is higher in municipalities where there is only a bank agent. Women tend to use informal mechanisms more than men. However, taking into account the standard error, these differences are not statistically significant.

Table 11. Place used to save money by financial presence and gender

Type of financial presence Gender

Bank agents only

Banco Agrario

Banco Agrario + other

Male Female

Home 72.6% 65.0% 75.8% 72.1% 64.9% (6.4%) (3.6%) (8.5%) (3.2%) (5.2%)

Bank or cooperative 24.3% 42.8% 22.9% 32.9% 34.9% (1.9%) (3.1%) (8.0%) (3.8%) (6.9%)

Informal savings group 12.9% 9.2% 6.1% 8.0% 11.4% (8.8%) (7.2%) (4.0%) (6.0%) (5.8%)

Source: Econometría

Those who do not save money at banks consider the fees too high and the banks too far away. In terms of gender, there are no significant differences. In terms of productive activity, farmers are more concerned with the associated fees (see Table 2-5 in Annex 2).

By type of presence both farmers and entrepreneurs consider the absence of a bank branch to be an important reason for not saving at a bank. This is seen in the municipalities that have only bank agents, which may suggest that people are not aware that they can manage their savings account via bank agents. Though it is true that one cannot always open a savings account through a bank agent, withdrawals and deposits can be performed using this channel (see Table 2-6 in Annex 2).

TRANSFERS

According to the survey, 39.2% of farmers and businesses sent or received money orders or transfers. There is no significant difference according to gender or type of productive activity.

Table 12. Farmers and businesses that sent or received money

Type of productive activity

Type of financial presence Gender Total

Farmer Business Bank agents only

Banco Agrario

Banco Agrario + other

Male Female

36.3% 44.6% 33.3% 41.2% 39.70% 39.2% 39.7% 39.4% (3.9%) (4.7%) (4.7%) (5.8%) (4.30%) (4.1%) (4.5%) (3.6%)

Source: Econometría

Among both farmers and businesses, the most common method for sending money is through money transfer operators. Only 5.6% of farmers and businesses use money orders. As financial presence increases, so does the use of banks, while the use of informal channels (e.g., taxis, buses, and friends) decreases. The use of money transfer companies also rises with increased financial presence. However, cash continues to be an important method for receiving money, especially for women and in municipalities where there is only the Banco Agrario: 10% of respondents receive money in cash.

Table 13. Mechanisms used to send money

Type of activity Gender Type of financial presence Total

Farmer Business Male Female Bank agents only

Banco Agrario

Banco Agrario + other

Money order

3.4% 9.2% 5.9% 5.0% 1.6% 6.5% 6.7% 5.6% (1.1%) (3.0%) (0.9%) (1.6%) (0.4%) (1.5%) (1.7%) (1.0%)

Post office or money transfer company

20.8% 25.2% 25.0% 18.3% 15.9% 23.5% 25.4% 22.4% (1.7%) (2.3%) (2.2%) (2.7%) (4.2%) (2.1%) (2.3%) (1.7%)

Account-to-account transfer

11.3% 18.2% 11.7% 17.3% 10.1% 15.5% 12.7% 13.9% (3.2%) (2.6%) (2.9%) (2.7%) (6.1%) (3.5%) (3.0%) (2.4%)

Taxis, buses, friends

5.7% 4.9% 4.1% 7.4% 9.2% 4.0% 5.8% 5.4% (2.0%) (1.0%) (1.3%) (2.1%) (5.3%) (1.4%) (2.4%) (1.4%)

Source: Econometría

When sending money, the most important attribute sought by respondents is security, followed by cost and speed. Farmers prefer fast and safe mechanisms, while businesses prefer the most secure. In all municipalities, regardless of the type of presence of financial institutions, security is still the primary criteria, followed by speed. Women tend to prioritize cost above speed (see Tables 2-7 and 2-14 in Annex 2).

Most money orders are under COP154,000; however, it is important to point out the low representativeness of this result (see Table 2-8 in Annex 2).

CREDITS

Currently, 71.7% of farmers and businesses have debts, without significant differences according to gender.

Table 14. Current debt by gender

Male Female Total

72.3% 70.8% 71.7% (2.7%) (3.1%) (2.6%)

The two main sources of financing are formal and informal sources, followed by commercial sources. As outlined in the table below, 49.4% of farmers and businesses have debts from formal sources.

The type of financial presence in municipalities has no impact on access to formal sources of financing, though the use of informal sources decreases with the presence of financial institutions. This is true for both farmers and businesses.

Table 15. Current sources of debt

Source of debt Total

Farmers

Businesses

Formal (Banco Agrario, banks, cooperatives)

49.4% 50.3% 48.0% (3.5%) (6.2%) (3.9%)

Commercial (producers’ associations, input shops, suppliers)

16.8% 16.1% 18.0% (0.7%) (1.6%) (1.2%)

Informal (friends, money lenders, pawnshops)

23.5% 25.2% 20.6% (3.0%) (3.9%) (2.0%)

Source: Econometría

Farmers and rural businesses also combine sources of financing according to their needs. What is surprising in comparison to other household surveys is that the most frequent source of financing is formal, for both farmers and businesses.

Table 16. Sources of debt by presence of financial institutions Farmers Businesses Only bank agents

Banco Agrario

Banco Agrario + others

Only bank agents

Banco Agrario

Banco Agrario + others

Formal (Banco Agrario, banks, cooperatives)

49.3% 51.8% 47.1% 47.7% 47.9% 48.0% (1.5%) (0.1%) (0.1%) (5.6%) (5.1%) (3.9%)

Commercial (producers’ associations, input shops, suppliers)

14.7% 18.7% 9.8% 18.1% 16.6% 18.0%

(2.7%) (1.8%) (3.4%) (1.5%) (2.8%) (1.2%)

Informal (friends, money lenders, pawnshops)

30.2% 24.4% 21.4% 19.5% 25.9% 20.6% (14.7%) (2.8%) (3.1%) (1.7%) (5.7%) (2.0%)

Source: Econometría

A significant gender bias was found, with women showing less access to formal credit than men.

Table 17. Access to formal credit by gender

Formal credit Male Female Total

Yes 53.2% 43.3% 49.4% (3.7%) (4.1%) (3.5%)

Total 100.0% 100.0% 100.0% Source: Econometría

Access to formal credit increases as income level increases. As the following graph shows, farmers have more access to formal credit than do businesses whose income is below COP3,500,000.

Figure 3: Access to formal credit by income quintile

Source:

Econometría

This same trend is confirmed when analyzing access to credit based on the value of the assets declared. Most farmers and rural businesses within the lowest asset levels report not having access to formal credit (more than 60%), while in the highest asset level, most (more than 60%) have access to formal credit.

Figure 4: Access to formal credit by assets quintile

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

< COP 260,000 Between COP 260,000 and

COP 690,000

Between COP 690,000 and

COP 1,500,000

Between COP 1,500,000 and

COP 3,500,000

More than COP 3,500,000

Total

Monthly income range Farm Business

0%

10%

20%

30%

40%

50%

60%

70%

80%

< COP 7,200,000 Between COP 7,200,000 and

COP 20,600,000

Between COP 20,600,000 and

COP 40,200,000

Between COP 40,200,000 and

COP 80,700,000

More than COP 80,700,000

Total

Farm Business

The most important source of formal credit is Banco Agrario. As the table below shows, 44.4% of farmers and businesses with access to formal credit have credit with Banco Agrario. More farmers (51.3%) have this credit than do businesses (32.7%). The preponderance of Banco Agrario is similar in all types of rural municipalities, with a marked gender difference: 50.4% of men have credit with Banco Agrario, while only 34.4% of women have it.

Table 18. Formal sources of credit

Type of activity Type of financial presence Gender

Total Farmer Business Bank agents only

Banco Agrari o

Banco Agrario + other

Male Female

Banco Agrario

44.4% 51.3% 32.7% 42.5% 45.6% 42.4% 50.4% 34.4% (3.7%) (4.2%) (2.7%) (4.6%) (4.6%) (11.4%) (3.0%) (4.8%)

Other banks 20.1% 16.9% 25.4% 22.1% 18.2% 24.1% 22.7% 15.8% (3.3%) (3.2%) (4.2%) (4.4%) (5.3%) (4.1%) (3.9%) (2.4%)

Cooperatives 16.1% 11.4% 24.1% 10.0% 17.0% 19.6% 14.3% 19.0% (3.6%) (1.6%) (7.0%) (3.9%) (5.8%) (1.9%) (4.3%) (4.0%)

Source: Econometría

Access to formal credit is closely related to the possession of a checking or savings account: 82% of farmers and businesses with some type of bank account also have formal credit. This overlap, which is more significant for farmers, may derive from banks’ practice of disbursing credit to an account in order to facilitate its management.

Table 19. Possession of bank account and credit Farmers Businesses Total Possession of bank account and formal credit

93.8% 87.3% 81.9% (3.1%) (5.9%) (2.5%)

Total 100.0% 100.0% 100.0% Source: Econometría

Formality, defined as keeping accounts and having a company registration, also plays a role in access to formal credit, particularly for businesses. As shown in the table below, 85.3% of businesses with access to formal credit keep accounts and have official registration, compared to only 35.3% of farmers.

Table 20. Formality among those with access to credit Farmers Businesses Total Formal business

35.3% 85.3% 32.5% (3.3%) (2.5%) (2.1%)

Total 100.0% 100.0% 100.0%

Differences in access to formal credit according to type of farming activity (agricultural versus livestock) are not very significant. However, permanent crops have significantly more access to formal credit (82%) than transitory crops.

Table 21. Access to formal credit by type of farming activity and type of crop Agricultural Livestock Other Permanent Transitory Formal credit 54.8% 45.1% 20.6% 82.1% 17.9%

(10.0%) (6.1%) (15.6%) (10.7%) (10.7%) Source: Econometría

For businesses, formal credit is most prevalent for activities related to commerce, accommodation and food industries, possibly as a result of the activities’ distribution for rural businesses, though it does not seem to depend on the type of activity.

Table 22. Access to formal credit by business activity Manufacture Commerce Accommodation and food Other services

Formal credit 42.8% 51.6% 48.3% 32.3% (28.1%) (4.5%) (12.3%) (11.4%)

Source: Econometría

Although the frequency of responses is low, for both entrepreneurs and farmers, the rejection of formal credit is due mainly to the applicant’s inability to demonstrate payment capacity or being above the maximum age allowed by the bank. There are no significant differences according to the presence of financial institutions or gender.

Among commercial sources of credit, the most important are shops for farmers and suppliers for businesses. There are no significant differences according to gender or the type of presence of financial institutions. The frequency of financing through equipment or appliance shops is not significant.

Table 23. Commercial sources of credit

Associations 3.4% 5.3% 0.3% (1.3%) (1.8%) (0.3%)

Shops 10.3% 14.8% 2.7% (1.6%) (1.9%) (0.9%)

Suppliers 9.2% 1.9% 21.5% (1.2%) (0.7%) (1.4%)

Source: Econometría

The main sources of informal credit are friends, neighbors and relatives; 30% of farmers and entrepreneurs that have informal credit have debts from relatives and friends. Very few have debts with moneylenders. The prevalence of debt with friends, family members, and neighbors is higher among farmers (33.8%) than entrepreneurs (23.5%) and is similar based on gender and the type of presence of financial institutions.

The use of moneylenders and pawnshops is not significant according to the presence of financial institutions or gender.

Table 24. Informal sources of credit

Type of activity Type of financial presence Gender agents only

Banco Agrario

Banco Agrario + others

Male Female

Moneylenders and pawnshops

4.1% 2.7% 6.6% (0.5%) (0.5%) (1.4%)

Friends, neighbors, family

30.0% 33.8% 23.5% 36.4% 28.3% 28.7% 29.9% 30.0% (4.0%) (5.3%) (2.6%) (16.8%) (2.9%) (3.2%) (3.0%) (6.0%)

Source: Econometría

* The gray part showed no significant differences.

Most farmers and businesses go to friends when they need money. As a second option, they use their savings or borrow from banks, NGOs, or cooperatives. Savings liquidation is also an important strategy and is used mainly by businesses.

Table 25. Strategies employed when they needed money

Type of activity Type of financial presence agents only

Banco Agrario

Banco Agrario + others

Savings account funds 12.4% 8.6% 18.7% 12.2% 12.1% 13.5% (2.2%) (2.7%) (1.6%) (4.7%) (3.1%) (2.6%)

Sale of animals 7.6% 9.9% 3.6% 7.7% 6.8% 9.9% (1.1%) (2.0%) (1.1%) (0.9%) (1.6%) (1.5%)

Moneylenders and pawnshops

5.6% 3.9% 8.6% 6.3% 4.2% 9.3% (0.6%) (0.9%) (0.6%) (0.5%) (0.3%) (2.1%)

Friends and family 58.8% 63.2% 51.4% 59.4% 59.9% 54.7% (4.2%) (6.4%) (2.6%) (9.9%) (6.0%) (2.8%)

Banks, cooperatives, NGOs

14.6% 14.1% 15.4% 19.4% 12.0% 17.7% (1.0%) (2.2%) (1.5%) (0.8%) (1.2%) (2.5%)

Input suppliers 5.6% 2.6% 10.8% 4.5% 5.6% 6.8% (1.0%) (0.8%) (1.7%) (2.2%) (1.4%) (1.1%)

Product presale 2.5% 3.0% 1.7% 5.5% 1.6% 2.6% (1.0%) (1.7%) (0.8%) (4.4%) (0.4%) (1.0%)

Job search 4.1% 6.1% 0.8% 2.6% 4.8% 3.3% (1.4%) (2.2%) (0.4%) (1.0%) (2.3%) (1.8%)

Source: Econometría

For those who do not have debts with banks or cooperatives, the main reasons mentioned are that these entities require too much paperwork, their interests rates are too high, and the individuals do not like to owe money to anyone. This result contrasts with one of the main reasons given for preferring banks and cooperatives to finance investments (see “Potential Credit” subsection below), which is low interest rates.

Though the level of representativeness is low, there are no significant differences according to gender or type of productive activity (see Table 2-15 in Annex 2).

Characteristics of the most important credit

Results confirm that the most important credit they currently have is from Banco Agrario. This is especially the case for farmers (see Table 2-9 from in Annex 2).

Of those with any form of credit, 87% say that they paid on time. This percentage is significantly higher among those who borrow from moneylenders, with 96.9% paying on time. Similarly, paying on time is significantly higher among people who borrow from input suppliers and appliance shops (see Table 2-10 in Annex 2).

The most common credit term is one year, but those who have loans with Banco Agrario have longer terms. Credit from commercial sources (such as input shops) typically has shorter terms, while credit from producers’ associations tends to have terms of more than one year. Informal credit typically has terms of less than six months (see Table 2-10 in Annex 2).

Large loans usually come from formal sources, while smaller loans tend to come from informal and commercial providers. While most loans from formal providers are for more than COP4.5 million, banks other than Banco Agrario and cooperatives tend to offer loans of up to COP1.6 million. Banco Agrario predominates on the credits above COP8.1 million while its share in credits below COP4.8 million is smaller. Credits from commercial providers tend to be below COP4.8 million and especially below COP1.6 million. Credits from informal providers are typically very small.

Table 26. Main credit amounts by source

Formal

<COP1.

6 million

COP1.6<CO

P4.8 million

COP4.8<CO

P8.1 million

COP8.1<COP

19.4 million

More than

COP19.4

million

Banco Agrario 0.4% 13.6% 18.3% 38.9% 28.9% (0.4%) (5.3%) (2.1%) (2.6%) (4.5%)

Other banks 10.5% 32.1% 17.6% 15.9% 23.8% (3.0%) (5.1%) (2.9%) (4.4%) (2.7%)

Cooperatives 9.0% 30.1% 13.7% 31.3% 15.9% (5.3%) (9.0%) (3.0%) (6.6%) (5.7%)

Commercial Associations 29.2% 38.7% 0.0% 24.4% 7.7%

(15.1%) (11.2%) 0.0% (22.4%) (8.1%) Shops 90.7% 1.0% 4.1% 4.2% 0.0%

(4.9%) (1.0%) (4.0%) (3.6%) 0.0% Input suppliers 46.1% 25.4% 7.6% 10.8% 10.1%

(11.4%) (12.9%) (1.9%) (6.1%) (2.9%)

Appliance stores 44.1% 45.8% 0.0% 10.1% 0.0% (7.7%) (7.2%) 0.0% (9.1%) 0.0%

Informal Moneylenders and pawnshops

54.2% 37.2% 0.8% 0.8% 6.9% (19.1%) (16.7%) (0.9%) (0.9%) (6.3%)

Friends, neighbors, family

61.0% 21.0% 10.0% 3.0% 5.0% (3.3%) (5.1%) (3.0%) (0.6%) (3.6%)

Total 24.1% 20.3% 13.8% 23.4% 18.4% (3.4%) (2.3%) (0.9%) (1.2%) (2.1%)

Source: Econometría

Regarding the most important credit, the average amount is COP9 million, without significant differences between farmers and businesses. However, men tend to have larger credits than women, and the average value is larger in municipalities with Banco Agrario and other banks. In municipalities with bank agents, the average value is smaller.

However, these average value indicators have a high standard error and must be handled with care.

Table 27. Average value and conditions of the most important credit

Average value

(COP)

Term (years)

Interest rate

Type of activity Farmer 8,442,905 3.27 17.4%

(840,951) (0.14) (1.2%) Business 9,991,402 2.50 30.0%

(834,810) (0.13) (3.2%) Gender Male 10,800,000 3.31 19.5%

(873,158) (0.13) (1.7%) Female 6,114,659 2.45 26.1%

(632,410) (0.14) (3.1% Type of financial presence Bank agents only 6,007,431 2.76 16.5%

(522,695) 0.19 (2.1%) Banco Agrario 10,000,000 3.12 22.8%

(1,025,479) 0.15 (2.5%) Banco Agrario + other

8,899,788 2.81 24.4% (1,016,238) 0.18 (2.7%)

Total 9,015,483 2.99 22.0% (591,001) 0.10 (1.6%)

INSURANCE

When asked about insurance possession, only 37% of farmers and 42% of businesses claimed to have an insurance. There are no significant differences observed according to gender or type of presence of financial institutions, though more rural men hold insurance compared to women.

Table 28. Possession of insurance

Total Type of activity Type of financial presence Gender

Farmer Business Bank agents only

Banco Agrario

Banco Agrario + other

Male Female

No 60.3% 61.6% 58.2% 56.5% 61.8% 59.7% 57.6% 64.8% (4.0%) (4.4%) (3.8%) (3.5%) (6.0%) (8.0% (4.4%) (4.8%)

Yes 38.7% 36.9% 41.7% 40.1% 37.7% 40.2% 41.3% 34.5% (4.0%) (4.5%) (3.8%) (2.3%) (6.0%) (8.1%) (4.5%) (4.9%)

Don’t know

1.0% 1.5% 0.1% 3.4% 0.5% 0.1% 1.2% 0.7% (0.5%) (0.8%) (0.1%) (3.0%) (0.1%) (0.1%) (0.8%) (0.2%)

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Source: Econometría

Among those with insurance, the most common types of insurance are funeral, health, life, and permanent disability. The low frequency of health insurance is surprising, since Colombia’s subsidized health regime offers free health care to most of the country’s low-income population; one possible explanation is that most users do not consider this an insurance. Further disaggregation of these variables has high standard errors, so it is not possible to confirm significant differences among groups. The most common insurance is funeral insurance, especially among farmers.

Table 29. Types of insurance held

Farmer Business Total

Health 20.4% 20.7% 20.5% (8.6%) (2.1%) (5.1%)

Life 18.0% 16.0% 17.2% (6.5%) (3.5%) (5.1%)

Funeral 50.1% 42.8% 47.2% (8.0%) (8.3%) (7.5%)

Damages 0.1% 2.3% 1.0% (0.1%) (0.9%) (0.4%)

Agricultural 1.7% 0.0% 1.0% (1.2%) 0.0% (0.7%)

Accident 0.0% 1.1% 0.4% 0.0% (0.5%) (0.2%)

Auto 9.6% 17.1% 12.6% (3.4%) (6.4%) (3.1%)

Source: Econometría

For the uninsured, the main reasons for not having insurance are cost, lack of knowledge, and the physical absence of insurance companies. The lack of knowledge is significantly higher among farmers than businesses. There are no significant reasons for the other categories (see Table 2-16 in Annex 2).

MOBILE MONEY SERVICES

Few know about the possibilities of accessing financial services through their cellphone. For 39% of farmers and entrepreneurs, cellphones can be used to send or receive money or to make payments; there are no significant differences according to type of informant, presence of financial institutions, or gender. Of this 39%, only 5.6% actually use their phone for such transactions, and 14.7% (19.2% of businesses and 12% of farmers) know someone who uses the phone for these activities. Of the total, only 11.9% say they trust cellphone-based financial transactions, with no significant differences by group.

Table 30. Use of cellphones to make financial transactions

Farmer Business Total

Do you think the cellphone can be used to send, receive money or make payments?

37.1% 42.1% 39.0% (4.8%) (4.30%) (4.0%)

Would you trust your cellphone to make payments or to receive or send money?

11.8% 12.1% 11.9%

(1.7%) (2.5%) (1.9%) Have you ever used your cellphone to send or receive money or to make payments?

5.0% 6.6% 5.6% (1.5%) (2.7%) (1.9%)

Do you know someone who performs such transactions on their cellphone?

12.0% 19.2% 14.7% (2.9%) (3.3%) (2.6%)

Source: Econometría

1.1.3 Potential market

This section describes respondents’ future investment plans and their potential needs for savings, credit, and insurance.

SAVINGS

The market potential for formal savings products can be estimated based on the survey results concerning respondents’ amount of savings and the expansion in the number of people per income quintile. According to these results, in the rural areas represented by the sample of municipalities, there are an estimated 74,691 businesses and farmers with an average savings of COP1,197,480–COP1,752,137 per person.

Among farmers, this represents a total market of COP55.9 billion. In terms of market potential, monthly income levels between COP260,000 and COP690,000 and more than COP3,500,000 are the ones with highest estimated savings values. However, by number of farmers, the largest market is among those with an income below COP690,000.

Table 31. Savings market potential among farmers Monthly income quintiles Average savings

(COP)

Number of farmers

Total Market Potential (COP)

< COP260,000 420,029 15,245 6,403,377,292

(154,783) (2,360)

Between COP260,000 and

COP690,000

580,340 11,067 6,422,958,284 (168,819) (2,557)

Between COP690,000 and

COP1,500,000

2,316,428 7,974 18,473,375,909 (1,788,446) (1,353)

Between COP1,500,000 and

COP3,500,000

1,623,004 4,753 7,715,421,145 (508,767) (1,828)

More than COP3,500,000 1,840,148 7,682 14,136,758,879 (769,312) (2,699)

Total 1,197,480 46,723 55,950,800,003 (477,749)

Source: Econometría

Among rural businesses, the total market potential is COP49 billion, with a total of 27,980 businesses. As with farmers, this potential is concentrated among those whose monthly income is between COP260,000 and COP690,000 or above COP3,500,000.

Table 32. Savings market potential among businesses Monthly income quintiles Average savings (COP) Number of businesses

Total market potential (COP)

< COP260,000 456,084 2,036 928,979,942

(280,225) (245)

Between COP260,000 and

COP690,000

808,262 4,357 3,521,794,336 (313,941) (429)

Between COP690,000 and

COP1,500,000

2,601,514 7,572 19,700,980,574 (1,258,451) (1,359)

Between COP1,500,000 and

COP3,500,000

1,146,753 6,872 7,881,019,448 (328,239) (1,875)

More than COP3,500,000 1,848,556 7,129 13,178,823,701 (499,443) (988)

Total 1,752,137 27,968 49,004,998,754 (433,145)

Source: Econometría

TRANSFERS

The market for transfers among farmers and rural businesses was estimated using the same methodology for finding the savings market potential (see Table 2-13 in Annex 2). In this case, the market potential for businesses is 5 times larger than that of farmers, given that the average number of transfers among businesses is 4.4 times greater than that among farmers.

Table 33. Market potential for transfers Farmers Businesses Income quintile Number Market

Potential

(COP)

Number Market Potential

(COP)

< COP260,000 15,245 1,187,198,698 2,036 65,263,514

(2,360) (245)

Between COP260,000 and

COP690,000

11,067 1,025,413,174 4,357 1,124,501,497 (2,557) (429)

Between COP690,000 and

COP1,500,000

7,974 1,730,416,79 7,572 2,053,277,688 (1,353) (1,359)

Between COP1,500,000 and

COP3,500,000

4,753 1,473,083,723 6,872 4,119,427,859 (1,828) (1,875)

More than COP3,500,000 7,682 3,087,435,201 7,129 15,154,172,223 (2,699) (988)

Total 46,723 8,503,547,608 27,968 22,516,079,259 Source: Econometría

POTENTIAL DEMAND FOR CREDIT

Future investments

When asked about future investments, 63% of farmers and 47% of businesses say they plan to make an investment in their productive activity during the next two years. In terms of gender, men have more investment plans than women.

Table 34. Plans to make an investment in the next two years Type of activity Gender Total Farmer Business Male Female

63% 47% 62% 49% 57% (3.7%) (7.7%) (1.9%) (7.7%) (3.8%)

Source: Econometría

For both farmers and businesses, investment plans consist mainly of making improvements to their productive activity—for example, the purchase of inputs and supplies for businesses and the purchase of animals and land for farmers (see Table 2- 17 in Annex 2).

As the table below shows, 26.2% of these investments have an average value of less than COP3 million, with the highest percentage concentrated in the COP3–COP10 million range. These values are much lower than the average credit reported by those who have one, showing a possible mismatch between financial institutions’ profitable supply and producers’ actual needs.

Table 35. Value of planned investments by quintile

Type of activity Gender Total

Farmer Business Male Female < COP3 million 30.7% 16.4% 26.1% 26.6% 26.2%

(1.9%) (2.4%) (1.3%) (3.3%) (1.4%) Between COP3 and COP6 million

21.7% 26.8% 20.6% 28.8% 23.3% (3.0%) (2.7%) (2.7%) (2.6%) (1.6%)

Between COP6 and COP10 million

23.6% 16.6% 23.1% 18.1% 21.4% (3.4%) (2.2%) (3.4%) (2.7%) (2.7%)

Between COP10 and COP20 million

15.9% 19.2% 17.7% 15.5% 17.0% (1.3%) (2.6%) (2.0%) (3.3%) (1.2%)

More than COP20 million

8.0% 21.0% 12.6% 11.0% 12.0% (2.8%) (2.2%) (2.7%) (2.6%) (2.2%)

Total 100.0% 100.0% 100.0% 100.0% 100.0% Source: Econometría

Most farmers and entrepreneurs prefer to finance these investments with banks or cooperatives, confirming the preference for formal credit for higher amounts and longer terms. In fact, 92.6% of farmers and businesses prefer this source of financing, without significant differences according to type of activity (see Table 2-18 in Annex 2).

The main reasons for preferring banks and cooperatives as sources of investment financing are their low interest rates and the ease and convenience of cash-flow adjusted payments, which is consistent with the reasons for preferring credit from banks and cooperatives.

If farmers were to take out a loan to finance their planned investments, the average loan size would be COP12.7 million. The preferred term would be between two and ten years both by average value and number of producers for these ranges.

Table 36. Market potential for credit for agricultural investments

Term quintiles Average credit

(COP)

Number of farmers

Market potential

(COP)

< 1 year 3,807,064 5,650 21,511,249,169 (539,422) (1,411)

Between 1 and 2 years 5,508,802 7,725 42,559,409,913 (556,626) (960)

Between 2 and 5 years 12,852,293 19,759 253,937,774,572 (950,181) (2,862)

Between 5 and 10 years

20,731,034 9,944 206,149,403,687 (3,106,602) (1,702)

More than 10 years 48,171,398 744 35,839,520,201 (7,314,952) (271)

Total 12,760,497 43,823 559,215,011,257 (862,953)

Source: Econometría.

As mentioned above, this credit would come primarily from banks and cooperatives; as a reference, the market potential would be equivalent to 8% of Finagro’s credit disbursements from 2013.

INSURANCE

In the last three years, 54.4% of respondents have experienced some type of adverse shock (72.7% of farmers, compared to 23.9% of businesses). The Atlantic region has the highest proportion and the Pacific region has the lowest.

Table 37. Rural population affected by an adverse shock

Type of activity Presence of financial institutions Gender

Total Farmer Business Only agent

Banco Agrario

Banco Agrario + other

Male Female

54.4% 72.7% 23.9% 58.4% 51.3% 60.2% 59.7% 45.9% (4.8%) (5.4%) (3.5%) (8.8%) (7.1%) (7.8%) (5.0%) (5.0%)

Source: Econometría.

Among those who had an emergency in the last three years, the most frequent emergencies are the death of animals (for farmers), natural disasters, price fluctuations, and health problems. For farmers, the shocks with the greatest economic impact are fires, landslides and floods, and price fluctuations. For businesses, they are health problems and breaches of contract (see Tables 2-20 and 2-21 in Annex 2).

Table 38. Shocks that caused significant losses during the last three years

Type of activity Gender

Total Farmer Business Male Female Fires, floods, landslides

22.1% 23.6% 14.8% 20.4% 25.9% (4.5%) (5.3%) (3.1%) (3.7%) (7.3%)

Armed groups 2.3% 1.4% 7.1% 1.2% 4.7% (0.9%) (1.0%) (1.8%) (0.7%) (1.6%)

Price fluctuations 20.9% 23.6% 7.2% 19.8% 23.4% (6.8%) (7.7%) (2.4%) (8.0%) (5.1%)

Breaches of contract

4.8% 1.7% 20.4% 3.1% 8.3% (0.6%) (1.1%) (3.5%) (0.6%) (2.3%)

Damage to equipment

2.9% 1.2% 11.5% 3.5% 1.6% (1.1%) (0.4%) (4.6%) (1.2%) (1.2%)

Health problems 11.4% 7.9% 28.9% 9.2% 15.9% (2.9%) (2.6%) (3.4%) (2.3%) (4.5%)

Death of relatives 3.3% 2.0% 10.3% 2.7% 4.6% (0.7%) (0.4%) (3.5%) (0.7%) (2.0%)

Death of animals 32.2% 38.5% 0.0% 40.0% 15.6% (6.6%) (7.9%) 0.0% (8.9%) (3.2%)

Total 100.0% 100.0% 100.0% 100.0% 100.0%

Of the respondents, 79% needed between six months and one year to recover from the shock. Women and people in municipalities with a greater presence of financial institutions tend to recover faster from emergencies.

Table 39. Time needed to recover from adverse shock

Gender Type of financial…