LAND BANK of the Philippines (LANDBANK) launched a new credit facility that aims to support small farmers and micro, small, and medium enterprises (MSMEs) involved in cacao, coffee, coconut, and processed fruits and nuts.

The state-owned bank said in a statement on Tuesday that the new credit facility seeks to give financial assistance to help boost the incomes of small farmers and provide employment to people in Eastern Visayas and Mindanao.

“LANDBANK will manage the credit facility in partnership with the Department of Trade and Industry (DTI), which will endorse beneficiaries qualified to borrow under the facility that include cooperatives, farmers’ associations and organizations, nongovernmental organizations (NGOs), and MSMEs,” it said.

LANDBANK President and Chief Executive Officer Cecilia C. Borromeo said the credit facility targets to improve the link of local agriculture value chains, starting from production to distribution.

“Together with DTI, we hope to increase the productivity and income of farmers and agri-based MSMEs who are crucial to the growth of these sectors,” Ms. Borromeo said.

Under the new credit facility, the state-run bank said borrowers can avail up to 90% of the project cost, net of matching grant from the DTI. The loan has a 5% per annum fixed interest rate for the first three years to fund production costs, machinery, facility, and equipment.

Projects eligible for funding under the credit facility include the production of crops such as cacao, coconut, coffee, and processed fruits and nuts; development of new plantation, replanting, rejuvenation, and rehabilitation of old trees; 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.

LANDBANK said loans for production are payable according to the crop cycle or gestation and payback period of the project, while loans for acquiring fixed assets such as machinery can be paid based on project cash flow.

It added that loans to be used as permanent working capital are payable up to three years, while loans for working capital are payable up to one year.

“The newly launched credit facility is in support of the Rural Agro-enterprise Partnership for Inclusive Development and Growth (RAPID Growth Project) implemented by the DTI and funded by the International Fund for Agricultural Development,” LANDBANK said. — Revin Mikhael D. Ochave

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