DA launches P3.21-B agro-credit facility

An agro-industry modernization credit and financing program (AMCFP) with P3.21 billion will be implemented by the Department of Agriculture (DA) to ease apprehension of small farmers, fisherfolk and other users of credit.

Agriculture Secretary Leonardo Montemayor said the design and operating guidelines of the AMCFP was approved by the Agricultural Credit and Policy Council (ACPC) which will also identify the government financing institutions (GFIs) that will administer the AMCFP Fund.

So far, the ACPC has identified QUEDANCOR and Land Bank of the Philippines (LBP) as administrators of the Fund pursuant to the decision reached by the ACPC during its meeting recently.

The management of AMCFP is considered one of the safety nets in the light of the scheduled phase-out of DCPs mandated by the Agriculture and Fisheries Modernization Act (AFMA). Other safety nets are the Agriculture and Fisheries Credit Guarantee Fund (AFCGF) also managed by QUEDANCOR pursuant to the AFMA; the P350-million rediscounting facility opened up by LBP to rural borrowers; and an initial wholesale guarantee fund of P123.9 million to be managed by QUEDANCOR under the Innovative Financing System of the agriculture department, ACPC, LBP and QUEDANCOR.

QUEDANCOR president Nelson Buenaflor said that management of the AMCFP would ensure the continuous flow of credit to the countryside considering the extensive record in farm lending of the two fund administrators. As fund administrators, the LBP Quedanca would tap private financial institutions (PFIs) such as rural banks, cooperative rural banks, cooperatives, people’s organization and non-government organizations as conduits for the P3.21-billion credit facility.

The AFCGF, on the other hand, would encourage other banks to lend more to farmers and agribusiness enterprises by guaranteeing banks of loan repayment in case of default.