Landbank releases loans to pandemic-hit businesses

MANILA, Philippines — Loans extended by state-run Land Bank of the Philippines (Landbank) to pandemic-hit businesses reached P20.07 billion as of end-April, a year after the assistance program was launched.

The bank said that through its Interim Rehabilitation Support to Cushion Unfavorably Affected Enterprises by COVID-19 (I-RESCUE) Lending Program, it has provided support to 434 borrowers comprised of 292 micro, small and medium enterprises (MSMEs), 81 cooperatives, 56 large corporations and five microfinance institutions (MFIs).

Of the total P20.07 billion approved loans, P18.21 billion has already been released.

Since April last year, the bank doubled the program fund of the I-RESCUE Lending Program from P10 billion to P20 billion to accommodate the increasing number of loan applications.

The loan facility, which will be available until Dec. 31, provides credit and loan restructuring assistance to pandemic-besieged businesses under more flexible terms and conditions.

Under the Landbank I-RESCUE Lending Program, MSMEs, cooperatives, MFIs and large corporations may borrow up to 85 percent of their emergency or permanent working capital requirement.

Terms are set at an interest rate of five percent per annum for three years, subject to annual re-pricing thereafter, and payable up to 10 years with a maximum of two years grace period on the principal repayment.

The program also offers a sub-credit facility for MSMEs and cooperatives, as well as self-employed individuals registered with the Department of Trade and Industry (DTI) and the Securities and Exchange Commission (SEC), who are severely affected by the ongoing health crisis.

Qualified borrowers may borrow a minimum amount of P100,000 or up to 85 percent of the actual permanent working capital requirement, but not exceeding P3 million, at a lower fixed interest rate of three percent per annum and payable for up to three years. Also, no hard collateral will be demanded from borrowers.

Existing Landbank clients may also avail of loan restructuring under the program through additional loan and extended repayment period to rehabilitate and restore their operational cash flow.

Landbank is among major government financial corporations that are at the forefront of pandemic response.

Other than loans to businesses, it also provides assistance to local government units wishing to undertake economic recovery programs.

It has also been providing educational loans to end users and institutions to support distance learning amid the pandemic.

Likewise, it is the conduit for government cash transfers and is the designated bank for account openings for those registering for the National ID System.