DA launches innovative loan program

The Department of Agriculture (DA) has set up what it calls innovative financing schemes (IFS) designed to reduce agri-lending risks and induce the flow of funds from urban-based banks to farmers and fisherfolk.

Agriculture Secretary Leonardo Montemayor said the scheme involves credit line and a guarantee facility designed to perk up agricultural productivity, with the investments more likely to be infused by the "ones who once never dared to invest due to the risks involved."

Montemayor said one scheme called Rural Household Business Financing (RHBF) program, attempts to customize financing packages for farmers to enable them to diversify their agri-businesses and undertake other enterprises.

"It will be implemented on a pilot basis in selected areas and later applied on a wider scale by financial institutions," he added. "This program will definitely help increase agricultural production."

The program is the result of an agreement between the agriculture department and the Land Bank of the Philippines, along with their respective micro-organizations such as the Agricultural Credit Policy Council, Quedan Rural Credit and Guarantee Corp., Land Bank and Rural Bankers Association of the Philippines.

During the opening ceremony of the Farmers’ and Fisherfolk’s Month last May 2 at the Bureau of Soils and Water Management, Montemayor handed over a check amounting to P100 million to Land Bank president Margarito Teves for the initial funding of the RHBF.

Montemayor also issued a check for P124 million to Quedancor president Nelson Buenaflor for a credit line and guarantee facility. Land Bank, on the other hand, handed over P350 million to RBAP chief operating officer Pablo Ronquillo for the initial capitalization of the rediscounting scheme.