Landbank opens P1-B credit facility for OFWs

MANILA, Philippines - State-run Land Bank of the Philippines has opened a P1-billion credit facility for overseas Filipino workers (OFW) who want to invest in the agriculture industry.

Landbank has signed a memorandum of agreement with the Departments of Agriculture (DA)  and Labor and Employment (DOLE) for the OFW Reintegration Program which provides a credit line and technical assistance to agriculture and fisheries enterprises.

Edgardo De Guzman of the lending management group of Landbank said the credit facility would be covered by a guarantee from the Labor department through the Overseas Worker Welfare Association (OWWA). 

The agreement for the credit facility was signed between the three institutions last May 7.

Agriculture Secretary Proceso Alcala said the DA would not provide counterpart funding for the credit facility, but would cover the provision of the technical assistance for OWS who would avail of financing for agribusinesses.

This would include technical trainings, management and marketing assistance, and support services.

The credit facility was opened to provide returning and active OFWs  sustainable economic opportunities beyond their overseas careers and while they are still in active service.

To be eligible for the loan, OFWs must be certified by OWWA as members and should complete the entrepreneurship development training by the agency.

 The loan may be extended to OFWs who have returned permanently  as well as those who still want to continue their careers overseas.

For those who wish to continue to work abroad, a special power of attorney (SPA) should be executed in favor of their spouse, parents or children.

Borrowers could  pursue agribusinesses with confirmed market and purchase order. The loan may be used as working capital for the chosen business or for fixed asset acquisition.

Depending on the project needs, an OFW could borrow a minimum of P300,000 and a maximum of P2 million.

Short term loans would have an amortization period of a maximum of one year while term loans would have an amortization period of not more than seven years inclusive of the two years grace period on the principal.

The term loans would fetch an interest rate of 7.5 percent per annum which would be fixed for the duration of the loan.