MANILA, Philippines — Government-owned Land Bank of the Philippines has opened a new credit facility for small farmers and enterprises engaged in the value chains of some high value commodities.
Landbank recently launched the Rural Agroenterprise Partnership for Inclusive Development and Growth or RAPID Growth credit facility.
The facility aims to support small farmers and micro, small, and medium enterprises (MSMEs) engaged in the agricultural value chains of cacao, coffee, coconut and processed fruits and nuts.
Landbank president and CEO Cecilia Borromeo said the bank seeks to provide financial assistance to stimulate business growth and sustainably increase the income of small farmers.
The new credit line is in support of the RAPID Growth Project implemented by the Department of Trade and Industry and funded by the International Fund for Agricultural Development, which aims to provide strategic business development interventions and matching grants to support agri-based MSMEs engaged in the identified value chains.
Landbank will manage the credit facility in partnership with DTI, which will endorse beneficiaries qualified to borrow under the facility that include cooperatives, farmers’ associations and organizations, non-profit organizations and MSMEs.
“Through this, we aim to strengthen each link of our priority agriculture value chains from production until distribution. We hope to increase the productivity and income of farmers and agri-based MSMEs who are crucial to the growth of these sectors,” Borromeo said.
Borrowers may avail up to 90 percent of the project cost, net of matching grant from the DTI, with a fixed interest rate of five percent per annum for the first three years to finance the costs of production inputs, machinery facility and equipment.
Eligible projects include the production of cacao, coconut, coffee and processed fruits and nuts, including the development of new plantations, replanting, rejuvenation and rehabilitation of old trees.
It also covers the establishment of nursery gardens, post-harvest activities such as fermentation and drying, processing or manufacturing such as roasting, grinding or milling, packaging and storing and trading.
Loans for production are payable based on crop cycle or gestation and payback period of the project.
Meanwhile, loans for fixed asset acquisition are payable based on project cash flow, but not more than the economic useful life of fixed assets or remaining useful life for secondhand or refurbished machines.
Loans for permanent working capital and working capital are payable up to three years and one year, respectively.
Land Bank is a government financial institution with the social mandate of promoting countryside development, servicing the financial needs of small farmers and fishers, micro, small and medium enterprises, countryside financial institutions, LGUs and government institutions.