Nelson C. Buenaflor, president and chief executive officer of Quedancor, said the two agencies will each raise P46 million to shore up the program meant to beef up the targeted 531 multi-purpose cooperatives in the country.
"The program’s priority is to assist cooperatives that are engaged in trading of different farm commodities such as fruit, vegetable and meat," Buenaflor said.
Aside from trading and non-farm activities, the program will also provide qualified cooperatives a revolving credit line or working capital for production, marketing, processing and related activities of cooperatives including micro-finance projects.
Buenaflor said the program should give fledgling cooperatives the flexibility to expand their business operations with supermarkets, groceries and other market outlets, Buenaflor said.
"Most trading cooperatives are hard-pressed to meet the requirements of their customers who ask for deliveries payable in 60 to 90 days. Their cash flow is tight and there is hardly enough revolving capital to allow them to guarantee uninterrupted supply to their customers. What we intend to do is to give them that room for them to be able to continue doing business," he added.
The loans will carry an eight percent interest per annum regardless of the mode and term of payment. A service fee of three percent per transaction will be charged for loans with a term of one year and below and three percent per annum for loans with a term of more than one year.
Of the 531 target-beneficiaries of the lending program, only 200 cooperatives passed the initial screening so far, which involved credit and background investigation (CBI) by Quedancor field inspectors.
Quedancor is targeting 12 cooperatives that will comprise the initial core of the lending program.
"Right now, our inspectors are conducting visitations to check the financial records of the candidate cooperatives because we will separate the viable cooperatives from the non-viable in to ensure the sustainability of the lending program," Buenaflor said.
By the end of February, P15.3 million would be initially released to the beneficiaries.
Eventually, Quedancor will require at least P1 billion to extend soft loans to all the targeted 531 cooperatives in the country.