Landbank makes loan application for farmers simpler and quicker
Published Oct 8, 2019 12:00 am
By Madelaine B. Miraflor
It’s been more than a couple of months since President Rodrigo Duterte threatened to abolish the Land Bank of the Philippines (LBP). Now the process for farmers to obtain loan from the state-run bank is simpler, quicker, and more affordable, said the bank’s president.
Cecilia C. Borromeo, President and CEO - Land Bank of the Philippines
“We understand that applying for loans can be intimidating, especially for small farmers and fishers, so we have started making basic improvements in our processes to make it easier for them to avail of loans,” said Landbank President and CEO Cecilia C. Borromeo.
Among the basic enhancements the bank made is the simplification of the loan application form, which has been condensed into one document from what used to be three separate documents including the Application Form, Sworn Statement/Attestation, and Data Privacy Consent.
Completing the form is also now more straightforward with mostly tick boxes, to make it easier for farmers and fishers.
The promissory note which used to be a 14-page document has also been simplified and shortened to one page, the bank said.
All of these things Landbank had to do after Duterte launched a tirade against the officials of the bank for failing to do its job to provide financing to farmers and fishermen.
During his fourth State of the Nation Address (SONA), Duterte gave Landbank a few weeks to get its act together and decide whether it’s a commercial bank or a state-run bank that focuses on financing the farming and fishing sectors, the top two poorest sub-sectors in the Philippines.
Former Agriculture Secretary Emmanuel Piñol was also vocal about his criticisms against Landbank. Last year, he called out officials of the bank for asking too much requirements from farmers who can only provide basic information.
Past-forward to present, Landbank said basic documentary requirements for small farmers and fishermen have already been trimmed down.
Borrowers of the Department of Agriculture’s (DA) Agricultural Competitiveness Enhancement Fund (ACEF) Lending Program, for instance, will only need to submit a loan application form, a simple farm plan, and barangay clearance.
Aside from this, Landbank said the processing of loan applications is also quicker – with average turn-around time of just one day as against the maximum 10-days commitment to the Governance Commission for GOCCs.
This is provided that the borrower submitted complete documents and credit/background investigation is favorable.
Landbank also made its programs more affordable by standardizing the interest rates at 5 percent per annum for most direct lending programs for small farmers and fishermen. These include the Accessible Funds for Delivery to Agrarian Reform Beneficiaries (AFFORD-ARBs) Program, which provides loans to finance production of rice, corn, and high-value crops, as well as the acquisition of small farm implements.
Retail lending programs for SFFs that the Bank administers for the DA also now have interest rates fixed at 2 percent per annum. These include the ACEF Lending Program and the Socialized Credit Program under the Sugarcane Industry Development Act (SCP-SIDA) funded by the Sugar Regulatory Administration.
Also available at an interest rate of 2 percent per annum is the Expanded Rice Credit Assistance under the Rice Competitiveness Enhancement Fund (ERCA-RCEF).
Under the Program, Landbank will lend up to P500 million annually for the next six years to rice farmers registered in the Registry System on Basic Sectors in Agriculture or RSBSA, and to DA-accredited cooperatives. For on-lending by cooperatives under ERCA-RCEF, interest rate is at 0 percent per annum, as long as effective pass-on rate to end borrowers is not higher than 6 percent per annum.
Cecilia C. Borromeo, President and CEO - Land Bank of the Philippines
“We understand that applying for loans can be intimidating, especially for small farmers and fishers, so we have started making basic improvements in our processes to make it easier for them to avail of loans,” said Landbank President and CEO Cecilia C. Borromeo.
Among the basic enhancements the bank made is the simplification of the loan application form, which has been condensed into one document from what used to be three separate documents including the Application Form, Sworn Statement/Attestation, and Data Privacy Consent.
Completing the form is also now more straightforward with mostly tick boxes, to make it easier for farmers and fishers.
The promissory note which used to be a 14-page document has also been simplified and shortened to one page, the bank said.
All of these things Landbank had to do after Duterte launched a tirade against the officials of the bank for failing to do its job to provide financing to farmers and fishermen.
During his fourth State of the Nation Address (SONA), Duterte gave Landbank a few weeks to get its act together and decide whether it’s a commercial bank or a state-run bank that focuses on financing the farming and fishing sectors, the top two poorest sub-sectors in the Philippines.
Former Agriculture Secretary Emmanuel Piñol was also vocal about his criticisms against Landbank. Last year, he called out officials of the bank for asking too much requirements from farmers who can only provide basic information.
Past-forward to present, Landbank said basic documentary requirements for small farmers and fishermen have already been trimmed down.
Borrowers of the Department of Agriculture’s (DA) Agricultural Competitiveness Enhancement Fund (ACEF) Lending Program, for instance, will only need to submit a loan application form, a simple farm plan, and barangay clearance.
Aside from this, Landbank said the processing of loan applications is also quicker – with average turn-around time of just one day as against the maximum 10-days commitment to the Governance Commission for GOCCs.
This is provided that the borrower submitted complete documents and credit/background investigation is favorable.
Landbank also made its programs more affordable by standardizing the interest rates at 5 percent per annum for most direct lending programs for small farmers and fishermen. These include the Accessible Funds for Delivery to Agrarian Reform Beneficiaries (AFFORD-ARBs) Program, which provides loans to finance production of rice, corn, and high-value crops, as well as the acquisition of small farm implements.
Retail lending programs for SFFs that the Bank administers for the DA also now have interest rates fixed at 2 percent per annum. These include the ACEF Lending Program and the Socialized Credit Program under the Sugarcane Industry Development Act (SCP-SIDA) funded by the Sugar Regulatory Administration.
Also available at an interest rate of 2 percent per annum is the Expanded Rice Credit Assistance under the Rice Competitiveness Enhancement Fund (ERCA-RCEF).
Under the Program, Landbank will lend up to P500 million annually for the next six years to rice farmers registered in the Registry System on Basic Sectors in Agriculture or RSBSA, and to DA-accredited cooperatives. For on-lending by cooperatives under ERCA-RCEF, interest rate is at 0 percent per annum, as long as effective pass-on rate to end borrowers is not higher than 6 percent per annum.