Department of Agriculture AGRICULTURAL CREDIT POLICY COUNCIL in coordination with Land Bank of the Philippines Quedan Rural Credit & Guarantee Corp. Innovative Financing Schemes – Special Agricultural Financing Window (IFS-SAFW) Cebu City
SPECIAL AGRICULTURAL FINANCING WINDOW (SAFW) A credit line/rediscounting facility designed to encourage rural lending agents to lend to collateral-short small farmers and fisherfolk. Lending Agents Eligibility Criteria Financing Facilities Loan Ceiling Eligible Sub-borrowers Eligible Projects Interest Rates Loan Maturity Collateral Requirements Procedures
Lending Agents • Banks • Cooperatives • Agri-Based Enterprises • Non-Government Organizations, People’s Organizations and other Institutions with juridical personality
Eligibility Criteria • Banks • Risk Asset Ratio (RAR) of not less than12%; • Past due rate of not more than 25%; • Profitable operations for the last three years; • Not experiencing liquidity problems; • No serious irregularities and exceptions found per latest BSP and LBP examination; and, • With no outstanding past due obligations with its creditors. more…
Eligibility Criteria… • Cooperatives • Registered with the Cooperative Dev’t Authority; • With lending experience equivalent to at least three years; • Past due rate of not more than 25%; • With written policies, systems and procedures on lending, accounting and bookkeeping and with installed books of accounts; • With a Core Mgt. Team composed of at least a full-time manager, duly bonded treasurer and bookkeeper; • With installed Capital Build-Up and Savings Mobilization Program; and, • With no outstanding past due obligations with its creditors. more… previous
Eligibility Criteria… • Agricultural-Based Enterprises • Profitable for the past three years; • No ownership dispute for three years; • No major labor dispute for the past three years; • No adverse findings on the owners and management; • Debt to equity ratio should not exceed 80:20; and, • At least 60% Filipino owned if corporation and 100% Filipino owned if single proprietorship. more… previous
Eligibility Criteria… • NGOs, POs & other Institutions • Registered with the Securities and Exchange Commission or other registering government entity; • With lending experience equivalent to at least three years; • Past due rate of not more than 25%; • With written policies, systems and procedures on lending, accounting and bookkeeping and with installed books of accounts; • With a Core Mgt. Team composed of at least a full-time manager, duly bonded treasurer and bookkeeper; and, • Authorized to borrow and lend under its Articles of Incorporation or Charter (in case of State Colleges or Universities) previous
Financing Facilities • Rediscounting Line for Banks Promissory notes issued by qualified sub-borrowers of banks under this program can be rediscounted up to 100% of the face value • Credit Line or Rediscounting for all other types of Lending Agents Eligible cooperatives, ABEs, NGOs/POs and other institutions could avail of a rediscounting line or credit line from the program.
Loan Ceiling • Credit line/Loan Limit to Lending Agents Lending Agent Facility Loan Limit Rediscounting Total rediscounts shall not exceed the Allowable Expansion Limit on Risk Assets 1. Banks 2. Coops Rediscounting and/ or Credit Line Amount inclusive of existing obligations shall not exceed 6 times the net worth Credit Line Amount should be equal to requirement of borrowers but not to exceed twice its existing loanable funds (exclusive of borrowings) 3. NGOs/POs Credit Line Amount not to exceed 75% of the appraised value of the collateral 6 times its net worth, whichever is lower 4. ABEs • Loan limit for Sub-Borrowers The loan amount shall depend on the type of the project to be undertaken by the individual sub-borrower but not to exceed P150,000.00 per sub-borrower.
Sub-Borrowers Eligible sub-borrowers are small farmers and fisherfolk who are not existing borrowers of any of the lending agents
Eligible Projects • agricultural crop production • Livestock • Poultry • fishery projects and • payment for farm services (labor, animal, machines).
Interest Rates • LANDBANK to Lending Agents Banks (except Commercial and Universal Banks) 91-day T-Bill Rate at the time of availment plus 1% Commercial & Universal Banks, Coops, ABEs & NGOs/POs 10% plus 2% service fee • Lending Agents to Sub-Borrowers The pass-on rate to sub-borrowers shall include a reasonable spread for the lending agent.
Loan Maturity & Mode of Payment • The loan maturity and mode of payment for each type of lending agent shall be based on LBP’s existing policies and guidelines; and, • The lending agents’ existing policies and guidelines on loan maturity and mode of payment shall be applied to sub-borrowers’ loans.
Collateral Requirements • For ABEs - Real Estate Mortgage; Chattel Mortgage; and/or other acceptable securities • For all other Lending Agents Loans to all other lending agents shall be secured by any or a combination of the following: For Rediscounting – Deed of Assignment of Promissory Notes of sub-borrowers together with the underlying securities which include, but not limited to crop insurance and QuedanCor guarantee coverage. For Credit Line – Assignment of crop insurance and/or QuedanCor guarantee coverage; Real Estate or Chattel Mortgage; or other acceptable securities.
Procedures • Lending to qualified agents The loan policies and guidelines in LBP’s existing Codified Approving & Signing Authority as well as other relevant policies, guidelines and procedures of LBP shall be applied to the ff: • accreditation of qualified lending agents; • processing and approval of loan application; and, • program fund disbursement and recovery. Additional procedures and requirement may be required by LBP. more…
Procedures… • On-lending to qualified sub-borrowers The existing lending policies, guidelines and procedures of the lending agents shall be applied in its lending operations under the SAFW. • QuedanCor Guarantee Availment of special guarantee is subject to QuedanCor’s approved implementing guidelines for the IFS. previous