Impact of Public Policies on Rural Informal Credit Markets in the Philippines: Synthesis of Survey Results and Lessons for Policy

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In the nonperformance of the formal financial sector to cater to the needs of some groups, informal measures have been its substitute. The informal credit system becomes a vital channel of credit to small and poor borrowers and in the mobilization of rural savings through innovative mechanisms. Utilizing the results from various surveys, this article examines how the changes in rural financial markets and changes in agricultural policies have contributed in developing the structure and operation of the Philippine informal credit system.