Small farmers gain access to microfinance

MANILA, Philippines - Eligible small farmers and fishers will now be able to avail of either agricultural production or microfinance loans with an interest rate of 15 percent per annum following approval by the Agricultural Credit Policy Council (ACPC) of the depository mode scheme of the Agro-Industry Modernization Credit and Financing Program-Cooperative Banks Agri-Lending Program (AMCFP-CBAP).

An initial fund of P400 million has been allocated for the program, which will be implemented in areas where participating cooperative banks operate.

According to ACPC executive director Jovita M. Corpuz, the ACPC has eliminated one layer in the current wholesaler-retailer scheme, resulting in lower interest rates.

“The depository mode scheme offers a pass on rate to borrowers at a maximum of 15 percent per year. This is much lower than the interest rates offered in our other programs,” Corpuz said.

She explained that under the said scheme, eligible cooperative banks will be given a stable, low-cost funding support, in the form of special time deposits, which will have a one-year maturity with a maximum interest of three percent per annum.

“The earnings from these special time deposits can be used to finance loans for small farmers and fisherfolk, in addition to the banks’ existing appropriate and incremental agricultural loan portfolio,” she said.

Corpuz said that should there be any “material adverse change in the financial condition or in the regulatory assessment of the cooperative bank, the special time deposit shall be due and demandable at anytime.”

As part of the guidelines, participating cooperative banks must also disburse the proceeds of the special time deposits to eligible farmers/fisherfolk borrowers within 90 days from the receipt of the deposit.

Rice, corn, fishery, and other high value crops prioritized by the Department of Agriculture will be financed under the program.

The ACPC is composed of the Secretaries of the Departments of Agriculture, Finance, and, Budget and Management; the Governor of the Bangko Sentral ng Pilipinas and the Director-General of the National Economic and Development Authority.