Financing Programs Loans and Financing Programs for Micro, Small and Medium Enterprises

Lending Program for Cooperatives

Program Title: Cooperative Lending Program
Program Objective: To help augment income, generate more economic activities and transform people's lives.

Eligible Borrowers:

A.   Agricultural cooperatives - small farmers, fisherfolk, and poultry/ livestock raisers.

B. Non-farmers/credit cooperatives - market vendors, employees, teachers, rural workers, women, etc. - which meet the following criteria:

• registered with CDA with a minimum of 60 members;
• minimum paid-up share capital of P30,000.00;
• all members should have attended Pre-Membership Education Seminar; o core management team composed of qualified full-time treasurer/cashier and qualified full-time bookkeeper and manager;
• with on-going savings mobilization program resulting to an annual average increase of savings of at least P500.00/member;
• with on-going capital build-up program resulting in annual incremental equity equivalent to P500.00 per member;
• with written policies, systems and procedures on membership management, capital build-up and savings mobilization, credit, accounting and budgeting, written plans and programs;
• with duly installed books of accounts;
• at least break-even in its operations;
• must be conducting periodic performance review operations;
• risk asset ratio of not less than 10%; and
• past due ratio of not more than 25% for bank assisted cooperatives/ newly accessing cooperatives.
• Sub-borrowers - individual households, businesses, and microenterprises.

Loan Purposes:

• Agricultural Production Loan (APL) - provision of short/medium/ long term loans, depending on the gestation period of the crop/ project, for relending to cooperative members engaged in crop production, livestock and poultry raising/breeding, fishery, and aquaculture projects and other agri/aqua-related projects, including cottage industries which utilize excess farm labor.
• Working Capital Loan (WCL) - for funding cooperative activities requiring operating capital for purchase of raw materials, processing and trading of inputs and/or finished products and the operation of fixed assets.
• Rediscounting Loan (RL) - improvement of liquidity and provision of capital requirements of eligible / accredited lending agents for funding relending operations using promissory notes of members of cooperatives.
• Fixed Asset Acquisition (FAL) - purchase of fixed assets to be used in the cooperative's operation.

Terms/Requirements:

Amount:

• Depends on the project needs or loan ceilings for traditional and high-value crops which should not exceed 80% of the project cost.
• For rediscounting - maximum of 85% of face value of the sub-promissory notes (PNs), except for sub-loans under the Innovative Financing Scheme which have 100% loan value on sub-promissory notes.

Interest Rate: Prevailing rate at the time of availment.

Maturity / Repayment:

• APL/WCL - lump sum depending on crop cycle and/or project cash flow.
• RL - co-terminus with the maturity dates of batch of sub-promissory notes rediscounted but not exceeding one year.
• FAL - equal quarterly, semi-annual or annual amortizations depending on the financial projections and production cycle of the project.

Security:

a. APL

• Deed of Assignment of PCIC insurance/guarantee coverage.
• Deed of Assignment of Produce.
• Deed of Assignment of Sub-borrowers PNs.

b. WCL and FAL

• Real Estate/Chattel Mortgage (REM/CM).
• Mortgage on Objects of Financing.
• Continuing Mortgage on Stocks.

c. RL

• Deed of Assignment Sub-borrowers' PNs including its underlying collaterals.

Other acceptable collaterals:

• Hold-outs
• Assignments
• REM
• Guarantee Coverage
• Joint and;
• Several Signatures (JSS)

Contact Details:

Program Management Department (PMD)
Phone: (02) 522-0000, (02) 551-2200  locals 2650, 2589
Fax: (02) 528-8541/42/43
Email: sme-pmu@mail.landbank.com