Cordillera farmers to get access to cheap loans

The European Commission (EC) and the Department of Agriculture (DA) are jointly setting up a trust fund that will provide upland farmers in the Cordillera region with low-interest loans to bankroll agriculture-related projects.

A memorandum of agreement signed yesterday by the EC and the DA provides for the establishment of a capacity building trust fund (CBTF) to ensure that indigenous people of the upland areas have continued access to financial resources required to finance their agro-based enterprises.

The trust fund takes off from where the Caraballo and Southern Cordillera Agricultural Development Programme (CASCADE), a seven-year project that started in 1997, left off. It was also funded by the EC.

CASCADE provided loans to upland farmers and communities in the region, especially those who do not have access to formal credit sources.

Outgoing Agriculture Secretary Luis P. Lorenzo Jr. said CASCADE implements critical microfinance programs such as the Rural Finance Centers (RFC) and the Savings and Loans Groups (SLG).

"An important aspect of the implementation of the RFCs and SLGs is the capacity building of the people who run it," Lorenzo said. "And improving their capacity through the CBTF will further help intended beneficiaries to have access to financial services."

The CBTF aims, among others, to improve delinquency management, credit assessment, loan monitoring, product development, governance, savings mobilization, and internal control of RFCs and SLGs.

For the farmer borrowers, the CBTF will help them to be qualified borrowers of GFIs such as the Land Bank of the Philippines by teaching them how to package their project proposals.

An initial seed fund of P5 million will be jointly put up by EC and the DA.