UCPB-CIIF’s business development officer Ma. Teresa Tumbali said the lending program is targeting farmer cooperatives and rural development banks, and is not limited to coconut-related agricultural activities.
"Rural cooperatives seeking to avail of loans must first undergo a six-month training. The loan terms are very soft, which means interest rates are between five to 10 percent. Most of our borrowers so far are rural banks," Tumbali added.
Fund sources are actually related to government programs such as the direct copra marketing project of cooperatives to oil mills, the Small Coconut Farmers Organization project of the former Ramos administration, and the Maunlad na Nayon Project of the former Estrada administration.
The UCPB-CIIF is also forming a separate microfinance project similar to the benchmark Grameen Bank approach successfully implemented in Bangladesh. The Grameen Bank approach in microfinancing is basically popularized access to credit without collateral as required by traditional banks.
The program proponents are closely reviewing and defining the profile of the applicants for the microfinance project, which is targeted to stat by the second semester of the year.
Meanwhile, the CIIF revealed that the UCPB Group is looking closely into the possibility of allocating some of the proceeds from the sale of coconut levy assets for the lending program.
The lending program funds targeting coconut farmers and workers have accumulated since the CIIF Foundation and Finance was established in 1994. The UCPB group and the United Cocochemicals Inc. initially placed P275 million to start the fund as revolving credit.
The Philippine Coconut Administration (PCA) noted earlier that these private lending programs of UCPB and the other government financial institutions (GFIs) will be tapped in the meantime that the levy is under litigation.
With the P50-billion coconut levy still under court litigation, the UCPB group established the foundation and financing to give coconut farmers and workers access some to financing for farm projects.
Coconut levies were collected from coconut farmers and farm workers during the Marcos administration to help finance development projects for the coconut industry.