Published and draft legislation - Colombia

Major agricultural sector reform

Decrees 2388, 2364 and 2371

  • Decree 2388, 3rd December, creating the Cross-sector Committee for Financial Inclusion
  • Decree 2364, 7th December, creating the Rural Development Agency (ADR: Agencia de Desarrollo Rural), establishing its purpose and organisational structure
  • Decree 2371, 7th December, creating and modifying some of the National Agricultural Credit Committee’s roles; also modifying the purpose and competences of Finagro

Last December, the Colombian government passed a series of legislative measures with the intention of making significant reforms to the agricultural sector. It created the Cross-sector Committee for Financial Inclusion and the Rural Development Agency (ADR: Agencia de Desarrollo Rural). It also carved out new roles for the National Agricultural Credit Committee and made changes to the Fund for financing the Agricultural Sector (Finagro), among others.

All these measures aim to adapt the Colombian agricultural sector to the current needs of the population, by creating a market-efficient and competitive industry that generates productive opportunities and encourages financial inclusion.

The Cross-sector Committee for Financial Inclusion is made up of representatives from a number of state bodies (Ministry of Agriculture and Rural Development, Ministry of Trade, Industry & Tourism, the financial watchdog Superintendente Financiero, among others) and is chaired by the Minister of Finance and Public Credit. This committee is responsible for rolling out financial inclusion policies, and for coordinating and creating strategies for public and private institutions to implement such policies. Its role is to make proposals and act as a consultative body.

The Colombian government’s intention with this committee is to spread the use of financial products and to facilitate access to credit. It may be an opportunity to make the state aware of the specific requirements of microfinance clients, create products aligned with their needs and to achieve greater financial inclusion among the population at large.

The Rural Development Agency is a state body, reporting to the Ministry of Agriculture & Rural Development, with its own legal status, assets and governance. As is the case with the Cross-sector Committee for Financial Inclusion, it is composed of representatives from a number of public bodies.

It is responsible for executing integrated agricultural and rural development policies, by designing the architecture of strategic projects run by the Ministry of Agricultural & Rural Development, and for policies to protect family-run farming operations and small-scale farmers.

These strategic projects involve both private and public initiatives to impact the creation of productive rural units, which could be helped by the use of microfinance products.

The National Agricultural Credit Committee and Finagro manage agricultural credit policies in Colombia. The regulations passed into law include changes to the structure and composition of both institutions, changes in their competences and in their authorised operations. Nevertheless, their purpose remains the same. The Committee is still in charge of designing farm-credit policies, such as collaterals, risks, lines of credit, etc. And Finagro is responsible for executing these policies through its rediscounting, savings acquisition and external credit programmes. Because microcredits for productive units in the rural sector are classified as a special risk, the specific programmes developed by these institutions are indispensable if this type of loan portfolio is to be effectively placed in the Colombian market.