LANDBANK intensifies focus on direct lending to ARBs, small farmers

Tuesday, June 4, 2019

In support of the government’s aggressive drive to increase the productivity and income of farmers and fishers through greater access to financing, the Land Bank of the Philippines is pursuing a more focused and direct approach in lending to provide more Agrarian Reform Beneficiaries (ARBs) and individual small farmers with access to credit.

“We are committed to vigorously extend our financial support to better serve small farmers and fishers, including ARBs, who need it most. We are strengthening our partnership with the Department of Agrarian Reform and the Department of Agriculture to make sure that we reach the rightful beneficiaries of credit and technical support,” said LANDBANK President and CEO Cecilia C. Borromeo.

AFFORD-ARBs

LANDBANK put in place a P5-billion direct lending program called Accessible Funds For Delivery to Agrarian Reform Beneficiaries or AFFORD-ARBs, which will specifically cater to ARBs engaged in rice, corn, and high-value crops production. The loan can also be used to finance the acquisition of small farm implements.

DAR, as program partner, will provide a list of eligible ARBs that LANDBANK can focus on, and will handle the mobilization of borrowers for loan orientation and financial literacy seminars prior to loan release.

Initial target beneficiaries of the Program are the roughly 58,000 recipients of the Certificate of Land Ownership Award (CLOA) distributed from 2016 to 2018. Other eligible CARP beneficiaries based on the list to be provided by DAR shall also be granted credit assistance under the program.  True to its name, AFFORD-ARBs comes with affordable interest rate at 6% per annum for short term loans and 7% per annum for long term loans.

EMBRACE

Another program designed to include as many Filipinos as possible into the fold of formal financial services is the EMBRACE or Empowering Barangays in Remote Areas through Credit and Enterprise Program. This direct lending program gives priority to small farmers who are tilling not more than five hectares of agricultural land and small fishers engaged in small scale fishing, seaweed farming, and aquaculture in unserved municipalities.

Also covered in the Program are micro enterprises with asset size of not more than P3 million and small enterprises with asset size of more than P3 million but not more than P15 million. Eligible projects include a wide array of agribusinesses, such as crop production, poultries, backyard piggeries, fishery production, as well as other agri-enterprise and livelihood projects.

These programs complement the Bank’s other retail lending programs for farmers and fishers and its menu of credit programs for conduits such as cooperatives, rural banks, non-government organizations, and microfinance institutions which in turn re-lend to small farmers, fishers and microenterprises.

Apart from credit support, LANDBANK also provides financial literacy and capability-building seminars to make sure borrowers are equipped with basic financial knowledge that will allow them to manage their finances and boost their income.

“While we focus on expanding direct lending to small farmer and fishers, we remain equally committed to maintaining solid relationships with conduits and partners that help us move forward in the pursuit of our mandate. With the ratification of RA11321 or the Sagip Saka Act, we are more than ready to provide responsive financing to farmer- and fisher-enterprises to help improve their income and boost the sector’s productivity,” Borromeo added.

LANDBANK remains as one of the biggest credit providers to small farmers, fishers, and MSMEs among government financial institutions.