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

Fisheries Financing Program

The Fisheries Financing Program (FFP) is a joint undertaking of the Agricultural Credit Policy Council (ACPC), Bureau of Fisheries & Aquatic Resources (BFAR) and Land Bank of the Philippines (LandBank). Created by virtue of ACPC Resolution No. 31-02 Series of 2007, the program entails the provision of loans to qualified borrower organizations/institutions that will use the funds either to finance value chain activities of small fisheries stakeholders or to extend micro-finance loans to small fishing households.

The FFP is one of the lending programs under the Agro-Industry Modernization Credit and Financing Program (AMCFP) - the government's umbrella financing program for agriculture and fisheries.

Program Objectives

To develop and implement innovative credit modalities applicable to the different production and value adding technologies of the fisheries industry and its stakeholders.

To identify and tap potential conduits that are familiar with , the fisheries industry.

Program Scheme

Through the FFP, Land Bank implements the provision of credit to eligible borrower organizations/institutions. The ACPC reviews, approves and validates loan releases charged against the FFP Fund. Funds from the program are used by borrower organizations/ institutions to finance value chain activities of small fisheries stakeholders or to extend microfinance loans to small fishing households. The BFAR, on the other hand, provides technical and marketing assistance Jo the program beneficiaries. The program's implementation is also monitored and evaluated by the Acpc.

Program Features

A. Borrower Organizations/Institutions

1. Eligible Organizations/Institutions

Organizations/institutions that are potential conduits but not yet accredited with Land Bank. These institutions are considered critical in the delivery of financial services in the fisheries sector.

2. Types of  Financing Facilities

• 2.1. Portfolio Rediscounting. Through a credit line provided by Land Bank, the borrower organization/institution can lend to individual borrowers whose promissory notes (PNs) are endorsed to Land Bank for 100% rediscounting.
• 2.2. Working Capital Loan. A short-term loan to cover the operational and manage-ment expenses of an income-generating project proposed by a borrower organization/institution.
• 2.3. Term Loan. A loan with a longer period of repayment schedule to enable the borrower organization/institution to expand its project's operational capacities and to increase its profits over a definite period of time.

3. Financing Terms

• 3.1. Credit Limits. Up to 85:15 debt to equity ratio but not to exceed P10.0 Million
• 3.2. Interest Rate. The applicable interest rate for all types of borrower organization/institution shall be based on the prevailing interest rates of Land Bank.
• 3.3. Loan Maturity:
  • Portfolio Rediscounting : Up to 180-days
  • Working Capital Loan : Up to 360 days
  • Term loan : Up to 3 Years
• 3.4. Security/Collateral. Assignment of sub-borrower promissory notes including underlying collaterals.

B. Sub-Borrowers

1. Eligible Sub-Borrowers

Eligible sub-borrowers are the household heads, spouses, or adult working members of small fishing households. Only one member per household is allowed to borrow at a single time.

2. Types of Financing Facilities

• 2.1. Microfinancing. Loans for fishery and fishery-related activities, microenter-prises, and other livelihood projects of small fishing households.
• 2.2. Value Chain Financing. Loans to -finance any of the value chain activities (production, processing and marketing) with direct forward or backward link with small fisherfolk

3. Financing Terms

3.1. Credit Limits

• Microfinancing:   The sub-loan amount shall depend on the repayment capacity of the sub-borrower based on his household's cash flow but not to exceed Php 50,000 per borrower.
• Value Chain Financing: The limit per sub-borrower is Php100,000.

3.2. Interest Rate

The applicable interest rate for sub-borrowers shall be based on the prevailing interest rates of the conduit organizations/institutions.

3.3. Loan Maturity and Mode of Payment

• Microfinancing: Not to exceed one year and the amortization schedule shall be based on the household's cashflow. At least 30% of the loan should be amortized, frequency of which shall be at the shortest interval possible,  but should not be longer than monthly.
• Value Chain Financing: Loan maturity shall be based on the borrower's repayment capacity but not to exceed a term of one year.

3.4. Security/Collateral

The chosen conduit organization/institution may impose securities on the sub-loans as they may deem necessary such as deed of assignment of personal assets (e.g. equipment, vehicles, etc) or issuance of post-dated checks.

For more information, please contact:

DA - Agricultural Credit Policy Council
28/F One San Miguel Bldg., San Miguel Ave.
Ortigas Center, Pasig City
Tel: (02) 636-3392, 634-3320/21/26

Land Bank of The Philippines
Land Bank Plaza 1898 M. H. Del Pilar
cor. Dr. J. Quintos Sts., Malate, Manila
Tel: (02) 522-000, 550-2200, 450-7001

BFAR - Industry Dev. and Support Division
2/F PCA Annex Bldg., Commonwealth Ave.
Diliman, Quezon City
Tel: (02) 929-9741, 474-4188