Interim REhabilitation Support to Cushion Unfavorably-affected Enterprises by CoVid-19
I-RESCUE Lending Program
Description:
In support of Republic Act No. 11469 or the “Bayanihan to Heal as One Act”, LANDBANK, through the I-RESCUE Lending Program, shall provide interim measures for Small and Medium Enterprises (SMEs), Cooperatives (Coops) and Microfinance Institutions (MFIs).
Body:
OBJECTIVE
The program aims to provide additional funds and loan restructuring under more flexible terms and conditions to eligible borrowers.
GENERAL LENDING GUIDELINES
1. Program Fund - Php10 Billion Initial Internal Fund
2. Loan shall be made available until December 31, 2020.
3. The program shall be eligible to SMEs, Coops and MFIs.
4. Types of Credit Assistance
a. Rehabilitation of Credit Programs
b. Rehabilitation thru Loan Restructuring
5. Loan Features
a. Rehabilitation Credit Programs
1) For SMEs
|
Loan Purpose |
Emergency fund for working capital |
|
Credit Facility |
Term Loan |
|
Loanable Amount |
Up to 85% of actual need provided the total loan |
|
Loan Tenor |
Up to five (5) years with maximum two (2) years grace period on the principal payment depending on cash flow |
|
Interest Rate |
5% per annum fixed for three (3) years, and subject to annual repricing thereafter based on one (1) year BVAL reference rate plus a spread based on credit rating, however, the interest rate shall not be lower than 5% p.a. |
|
Penalty |
24% p.a. |
|
Mode of Payment |
Monthly, quarterly, semi-annually or annually based on cash flow; further, payment shall be made through debit from existing deposit account with LANDBANK, over-the-counter, issuance of post dated checks (PDCs) and/or other e-Banking channels |
|
Other fees |
Standard fees and charges shall apply
Application, Credit Information/Background Investigation (CI/BI), commitment and pretermination fees shall be waived |
|
Mode of release |
Lump sum or staggered loan release and shall be credited to the borrower’s account maintained with LANDBANK |
|
Collateral |
Any acceptable collateral to the Bank, if applicable
PDCs to cover maturing principal and interest amortizations |
2) For Coops and MFIs
|
Eligible Projects/ Loan Purpose |
Wholesale Lending Livelihood Financing – to augment credit fund for on-lending to Small Farmer and Fishers (SFFs)/Micro, Small and Medium Enterprises |
|
Credit Facility |
Term Loan |
|
Loanable Amount |
Wholesale Lending Livelihood Financing
Working Capital – based on the borrower’s funding requirements on its on-lending to its sub-borrowers’ working capital requirements; the Coop/MFI shall submit a masterlist of its newly approved sub-loans for its sub-borrowers affected by disaster which LANDBANK shall fund as working capital of the Coop/MFI; maximum amount of loan shall be up to 85% of the Coop/MFI newly approved sub-loans to disasteraffected sub-borrowers |
|
Loan Tenor |
Up to a maximum of five (5) years |
|
Interest Rate |
5% per annum (p.a.) fixed for three (3) years, and subject to annual repricing thereafter based on one (1) year BVAL reference rate plus a spread based on credit rating, however, the interest rate shall not be lower than 5% p.a. |
|
Penalty |
For coops – 3% p.a. with 180 calendar days grace period
For MFIs – 24% p.a. with 60 calendar days grace period |
|
Mode of Payment |
Principal – payable upon maturity of Promissory Notes (PNs) per batch
Interest – payable monthly, quarterly, semiannually in arrears or lump sum upon the maturity of the PNs
In case of varied maturities of sub-PNs, - the due date of the borrower’s PN shall be the earliest due date of sub-PNs per batch regardless of the project type; or - upon maturity of the borrower’s PN, payable monthly, quarterly, semiannually or lump sum depending on cash flow
Payment shall be made through debit from existing deposit account with LANDBANK, over-the-counter, issuance of PDCs and/or other e-Banking Channels |
|
Other fees |
Standard fees and charges shall apply
Application, CI/BI, commitment and pretermination fees shall be waived |
|
Collateral |
Any or combination of the following:
If Sub-PNs are already available at the time of loan release: - Assignment of Notes Receivables/ Subborrower’s PNs with at least 100% cover, plus underlying collateral, if any - Assignment of Proceeds of guarantee claims from the Philippine Guarantee Corporation, Credit Surety Fund and insurance claims, from the Philippines Crop Insurance Corporation, if any
If sub-PNs are not yet available at the time of loan release: - PDCs to cover principal and interest amortizations for each PN |
|
Other Terms |
Standard Risk Asset Acceptance Criteria shall apply except for Debt to Equity Ratio which shall be at 90:10 and that computation of net Past Due Rate shall be based on financial statements (F/S) before occurrence of calamity. |
b. Rehabilitation thru Loan Restructuring
|
Loan Purpose |
Restructuring of existing loan account via additional loan, extended repayment period, or other means (or combination of means) to enable existing borrowers to rehabilitate and restore operational cash flow |
|
Loan Tenor |
Up to maximum of ten (10) years with up to three (3) years grace period on principal and one (1) year grace period on interest depending on cash flow
Note: The deferred interest shall be non-interest bearing and shall be amortized equally either monthly or quarterly within three (3) years inclusive of one (1) year grace period. |
|
Interest Rate |
5% p.a. fixed for three (3) years, and subject to annual repricing thereafter based on one (1) year BVAL reference rate plus a spread based on credit rating, however, the interest rate shall not be lower than 5% p.a. |
|
Penalty |
Waived |
|
Mode of Payment |
Monthly, quarterly, semi-annually or annually depending on cash flow |
6. Other Terms and Conditions
a. The borrower shall authorize the Bank to debit the account for maturing principal and interest amortization.
b. Provision of Point of Sale Terminal by the Technology Management Group.
c. Coops/MFI borrowers shall be entitled to LANDBANK assistance, such as trainings.
DOCUMENTARY REQUIREMENTS
1. Credit Program for SMEs
a. Pre-Processing
1) Accomplished Loan Application Form (with pictures, if applicable)
2) Securities and Exchange Commission (SEC)/Department of Trade and Industry (DTI) – certified or Corporate Secretary certified true copy of the SEC/DTI Certificate of Registration, Articles of Incorporation and By-Laws
3) Corporate Secretary-certified true copy of the duly notarized certificate confirming the resolution of the Board of Directors and/or committees or bodies authorizing the application for LANDBANK loans and specifying the authorized signatories
4) Valid certificates/permits/licenses/clearances from concerned government agencies
5) Audited F/S for the last three (3) years plus the current year F/S
6) List of key officers of the firm
7) Client Information and Signature Specimen Card and at least one valid/government ID such as but not limited to unexpired passport, Social Security System, Government Service Insurance System or driver's license
8) Tax Identification Number
Note: Applicable only if the above-listed documents are not on-file.
2. Credit Program for Coops and MFIs
a. Pre-release
1) Letter-request to avail from the Term Loan from Coops/MFIs signed by its authorized signatories, indicating among others the following:
a. Amount of loan to be availed
b. No. of prospective sub-borrowers
c. Name of commodity/projects to finance
Note: This is for the purpose of determining more
2) Masterlist of sub-borrowers/sub-PNs to be assigned, if available
3) PDCs, if the Masterlist of Sub-Borrowers is not yet available
4) The Coop/MFI shall maintain custody of all sub-borrower’s PN including underlying collateral. The Coop/MFI shall submit a Notarized undertaking to keep custody of the sub-borrower’s PN and its underlying collaterals provided in favor of LANDBANK and that the same are open for inspection and audit of LANDBANK representative, anytime at the Bank’s discretion.
b. Post-release
1) The Coop/MFI shall submit a Schedule of Loans Disbursed under the I-RESCUE Lending Program (Exhibit 1) not later than sixty (60) calendar days after the loan has been released
2) The Coop/MFI shall return of to LANDBANK the amount the undisbursed amounts including the interest incurred computed up to the date of return/payment not later than 91st calendar day from date of loan release, if any.
3) No subsequent releases shall be made until the Coop/MFI has submitted the complete schedule of loan receivables and has returned/paid to LANDBANK the undisbursed amount including the interest incurred.
4) Validation of sub-PNs shall be covered by the provisions of CPI 2016-007 (Revised Guidelines on Post Validation, Verification and Applicable Sanctions Relative to Credit Facilities secured by Deed of Assignment of PNs), as may be amended.
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