Agri credit council okays new financing scheme

Agriculture Secretary and ex-officio chairman of the Agricultural Credit Policy Council (ACPC) Arthur Yap said the guidelines for implementing a new innovative financing scheme, the Agri-Fishery Microfinance Program (AFMP), have been approved.

Yap said the ACPC approved the creation of. the AFMP, mandating the provision of P200 million from the Agro-Industry Modernization Credit and Financing Program (AMCFP), the government’s umbrella financing program for agriculture and fisheries.

The AFMP seeks to increase credit support to the priority commodities and special priority zones of the DA by leveraging the P200 million program allocation with an initial P1.5 billion counterpart fund by Land Bank, the program’s implementing agency.

The AFMP will give first priority to the following commodities:  rice, corn, high value crops such as banana, rubber, pineapple and, vegetables, poultry, livestock and fishery products. 

The program’s first set of priority areas comprise all the provinces of the Bicol Region.

The AFMP will have two components: the micro-finance and the value chain financing modules.

The microfinance module will enable credit retailers to extend smaller loans to small farming or fishing households for any or a combination of farm, off-farm and non-farm activities.  The loan amount to small farmers and fisherfolk would depend on their assessed repayment capacity based on their households’ cash flow, but not to exceed P50,000 per borrower.

The value chain financing module allows credit retailers to extend loans or financial services to support the appropriated value chain activities, such as production, processing and marketing that have forward or backward links with small farmers and fisherfolk. 

Financing limit per sub-borrower is P100,000.

The program’s loan facilities for micro-financing retailers include  portfolio rediscounting,  term loan and working capital loan.

Value chain financing retailers may apply for either a working capital loan or a term loan.

Portfolio rediscounting would have a term of up to 180 days with principal and interest payable upon maturity. 

Working capital loans are payable within 360 days, with interest paid monthly or quarterly. 

Term loans are payable up to three years with principal and interest amortized quarterly and a grace period of six months on principal.