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

Countryside Loan Fund Programs CLF I, II, and III)

Program Title: Countryside Loan Fund Programs CLF I, II, and III)

Program Objectives: A wholesale credit facility from World Bank made available to Participating Financial Institutions (PFIs) for on-lending to eligible private investment enterprises:

• To provide financial support to the rural economies to emerge stronger from the financial crisis and resume sustained rapid economic growth in the near term;
• To support the government in its effort to alleviate rural poverty by accelerating private investments in the countryside to boost productivity, generate employment, and raise income;
• To provide further assistance through additional short, medium, and long term financial resources for viable investments in the rural areas; and
• To generate foreign exchange awareness or savings to improve the country's balance of payment position.

Eligible PFIs:

• Commercial Banks/Unibanks.
• Rural Banks.
• Thrift Banks.
• Non-bank financial institutions.

Eligible Sub-Borrowers:

• Sole Proprietorships
• Partnerships
• Corporations (at least 70% Filipino-owned)
• Cooperatives/Associations

Eligible Projects:

• Agriculture and agri-related productive activity;
• Food and agro-processing venture;
• Manufacturing activity that generates employment/export;
• Product distribution activity/Trading;
• Service-oriented project that supports economic activity;
• Environmental protection project;
• Tourism-related project; and
• Property development project:
  • CLF I & II - Industrial Estate Development.
  • CLF I, II, & III - Socialized and Low Cost Housing Projects, Commercial Building for lease with a gross/total floor area of not more than 15,000 sqm., including parking and other areas.

Note: Projects for funding under the CLF Programs must comply with all the laws and regulations of the Philippines related to environmental protection.

Eligible Sub-Project Location:

• CLF I & II - Nationwide; sub-projects located in NCR should be engaged in agriculture and agri-related activities.
• CLF III - Nationwide; sub-projects located in Cebu City and NCR should be engaged in agriculture and agri-related activities.

Loan Purposes:

• Working Capital - initial or incremental;
• Fixed Asset Investment - construction, expansion, or rehabilitation of productive facilities excluding land purchase; and,
• Special Financing Package - any or combination of the following:
  • Extension of maturity or grace period of existing loan, conversion of existing dollar loan to peso loan
  • Cost overruns due to price escalation/peso depreciation

Terms/Requirements:

Amounts:

• CLF I & II (Peso) - Maximum of P300.0 Million (subject to fund availability).
• CLF III (Peso & US Dollar)
  • Maximum of P100.0 Million (SME, Non-SMEs provided engaged in agriculture, agri-related business, and environmental protection activities).
  • Maximum of P50.0 Million (all other eligible sub-projects).

Interest Rates:

• LANDBANK to PFIs
  • Variable Rate - Based on Weighted Average Interest Rate of 91- day Treasury Bills or floor price, whichever is higher.
  • Fixed Rate - prevailing variable rate plus a premium based on the remaining term of loan (over 1 year to 5 years - 1%; overS years- 2%)
• PFI to Sub-borrower - As negotiated between PFI and the sub-borrower

Maturity / Repayment: Monthly or Quarterly payments.

Security: Loans shall generally be secured by tangible collaterals (i.e., Real Estate/Chattel Mortgage, Mortgage Trust Indenture, Holdout on deposits, etc.) or acceptable guarantees consistent with current banking practices, pertinent laws and BSP regulations.

Contact Details:

Wholesale Lending Department
Phone: (02) 405-7338/7239,    (02) 551-2200 locals 2468, 7338 2797, 7239, or 2707
Fax:       (632) 528-8523
e-mail: plg@mail.landbank.com