UCPB releases P1.9B loans to SMEs

The socio-economic financing arm of the United Coconut Planters Bank (UCPB) has released a total of P1.9 billion in loans for small and medium enterprises (SME) and microentrepreneurs.

At of the first half of 2005, the UCPB-Coconut Industry Investment Fund (CIIF) Finance and Development Corp. (CocoFinance), lent out a total of P1.9 billion to a reported 263,000 beneficiaries under more than eight lending programs.

The lending program was launched to liberate coconut farmers from the onerous and usurious lending habits of coconut traders who also double as loan sharks.

"We would like to liberate the coconut farmers from the trader’s environment," said Edgardo C. Amistad, CocoFinance president.

Traders not only lend out at outrageous rates but also extend loans not directly related to farming activities. "There is a dearth of credit for borrowings for other livelihood activities."

Amistad disclosed that socio-economic finance company launched several pilot microfinance projects which has adopted a Grameen-type format.

Meanwhile, Mindanao accounted for 40 percent of total loan releases with Luzon and the Visayas both with an even 30 percent.

The delinquency rate averaged at 5.94 percent while the "worst" performer was the SME lending program with a high delinquency rate of 28.16 percent. The SME group has the largest number of beneficiaries numbering 55,394.

Of the total loans, the outstanding loans remain at P581 million with a past due of P34.4 million.

The principal beneficiaries of CocoFinance are coconut farmers and their dependents. Based on information from the Philippine Coconut Authority (PCA), there are between three to 3.5 million coconut farmers looking over approximately 325 million coconut trees.

Lending are initiated through institutions from the smallest unit (mainly cooperatives) of 15 individuals to rural financial institutions such as rural banks and non-government organizations (NGOs).

The lending programs under the banner of the UCPB-CIIF are: the Buklod Unlad Microfinance Program (BUKO), Conduited Buco Program (C-BUKO), Magniniyog Tungo sa Tunay ng Pag-unlad (Matutupad), Cooperative Microenterprise Crdit Program (CMECP), Rural Finance Institution Microenterprise Creidt Program (RFI-MECP), Small and Medium Enterprises Credit Program (SMECP), Niyog, Abono, Pag-iwi, atbp (NAIIBA), and other minor programs like the Freedom Loan Program, LifesavingsLoan Program, CIIF Dealership Program and the Cattle Under the Coconut Tree Program.