THE Land Bank of the Philippines (LandBank) said it will simplify its application processes to allow farmers better access to its products.
LandBank President and Chief Executive Officer Alex V. Buenaventura on Thursday said that the bank will also be approaching farmers directly instead of relying on them to visit bank branches.
“This program of ours is new. We have simplified things — very simple, you only need one application form [to apply for the loan],” he added.
Direct marketing approaches will rely on a bank master list of eligible small farmers, fisherfolk and cooperatives.
The master list will be drafted by regional offices of the Department of Agrarian Reform and the Department of Agriculture.
LandBank will also introduce an inclusive financing program for farm cooperatives, targeted at cooperatives that enter into a farm management and marketing agreement with a major agricultural corporation.
This program will also cater to cooperatives with bad credit records because it will be the agricultural corporation listed as the borrower.
“Nationwide, we wrote off P1.7 billion [worth of loans] in the last 10 years. To make a long story short, 95% of them (cooperatives) weren’t able to pay us back and we just wrote it off,” Mr. Buenaventura said.
“We’ll come back for those 95% to help them through other means.”
The bank hopes that such partnerships will produce “global standards” of productivity, buy up the output of the small farmer cooperative and increase farm incomes above the poverty threshold.
The bank hopes to make the loan attractive to the corporate partner by lowering its equity requirement to 10% of the validated cost.
Mr. Buenaventura expects the process of rehabilitating the credit of agricultural cooperatives to be “bloody.”
LandBank will be tapping funding from Small Farmers Corporative Bonds, which will be auctioned to other banks in compliance with the Agri-Agra Reform Credit Act of 2009.
The Agri Agra Law requires banks to lend at least 25% of their portfolios to agricultural and fisheries ventures and at least 10% to agrarian reform beneficiaries.
Banks consider agricultural loans to be “high risk,” and such bonds could be viewed as an easy way to comply with the law. — Anna Gabriela A. Mogato