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LANDBANK launches new lending program for countryside lenders

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Land Bank of the Philippines (LANDBANK)
BW FILE PHOTO

STATE-RUN Land Bank of the Philippines (LANDBANK) has launched a new lending program that will assist countryside financial institutions (CFIs) affected by natural calamities, man-made disasters, pests and diseases and outbreaks like the coronavirus disease 2019 (COVID-19) pandemic.

In partnership with the Bangko Sentral ng Pilipinas and the Philippine Deposit Insurance Corp., LANDBANK has rolled out the Countryside Financial Institutions Enhancement Program-2020 Calamity Assistance Program (CFIEP).

The CFIEP will provide additional working capital to CFIs such as cooperative banks, rural banks, and thrift banks affected by extensions or defaults as a result of calamities.

LANDBANK said the program may augment the liquidity of affected CFIs and encourage them to continue lending, particularly to the agricultural sector.

“We hope that the CFIEP will help them recover from the damages and disruptions in their operations, and enable them to restore operational cash flows, thus, allowing them to continue lending to small farmers,” LANDBANK President Cecilia C. Borromeo said in a statement.

The program will be offered by LANDBANK to eligible CFIs at an amount equivalent to 90% of their affected existing portfolio or P10 million per institution, whichever is lower, provided that the loan amount does not exceed the institution’s borrowing capacity.

LANDBANK said the loan will have a 4.5% interest rate per annum, fixed for one year and subject to annual repricing after.

The loan is payable up to five years, with up to one year grace period on principal and interest rates.

“The CFIs are also expected to relend the fund to their affected end-borrowers at concessional interest rates,” LANDBANK said. — Revin Mikhael D. Ochave

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