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

Microfinance Program for Retailers (MFIs)

The LBP's microfinance program is in support of the government's call for the bank to address the credit requirements of the Barangay Micro Business Enterprises (BMBEs) and the poor sector by opening a special wholesale financing window thru various Microfinance Institutions (MFIs).

General Objectives

To support government efforts to alleviate poverty by empowering the marginalized sector towards economic growth.

Specific Objectives

1. To expand the Bank's outreach to the poor who do not have access to formal financing system;
2. To promote the active participation of MFIs in the credit delivery system;
3. To promote savings mobilization of poor households; and I
4. To strengthen partner-MFIs in their microfinance operations and help deliver capability building support to micro-enterprises.

Mode of Delivery

Landbank shall provide funds to the following MFI-Retailers which, in turn, lend the same to microfinance sub-borrowers:

1. Cooperatives (Co-ops)
2. Countryside Financial Institutions (CFIs)
3. Non-Government Organizations (NGOs)

Eligibility Requirements

1. Passed the Risk Asset Acceptance Criteria (RAAC) of the Bank;
2. New MFIs and other MFIs without existing credit line/loan with PCFC or existing MFI clients of PCFC whose credit requirement is in excess of P100 Million;
3. Duly registered with CDA in case of co-ops; BSP and SEC in case of CFIs, and SEC in case of NGOs;
4. With at least three (3) consecutive years experience in lending, including one (1) year (most recent) on microfinance operations;
5. With audited financial statements (FS) for the last three (3) years (audit conducted by a reputable external auditor);
6. With capacity to engage in microfinance, as evidenced by the following:

• a. Functioning MIS/loan tracking system (will allow regular monitoring of microfinance operations as evidenced by timely generation of basic financial, loans tracking, and aging reports using Portfolio at Risk [PAR]);
• b. With savings mobilization program and microfinance guidelines/operations manual in place;
• c. With microfinance business plan for at least three (3) years as approved by its Board of Directors;
• d. At least two (2) members of its Board of Directors (BODs)/officers with one (1) year experience in microfinance and/or intensive training on microfinance (minimum of 7 days training) in accredited/reputable training institution/s;
• e. With a separate unit to handle microfinance operations;
• f. At least three (3) full-time and trained microfinance officers/staff (minimum of 5 days microfinance training in accredited/ reputable training institutions); and,
• g. With a continuing staff development/training program on microfinance.

Program Features

a. Credit Facility Available

1. Short Term Loan:  Working Capital and Rediscounting
2. Term Loan

Basic Lending Policies

1. Loan Purpose

• a. Working Capital
• b. Rediscounting

2. Term of loan

• a. Short Term Loan - One-year credit line
• b. Term Loan - Five (5) years

3. Availability

• a. Short Term Loan - Up to 360 days PNs
• b. Term Loan - Maximum of 3 tranches, but to be availed within one (1) year from the date of signing of loan agreement.
• c. Maximum Loanable Amount
  • For Co-ops - up to 6 times of its networth
  • For CFIs - not to exceed its Allowable Expansion in Risk Assets (AERA)
  • For NGOs - should be equal to the requirement of borrowers but not to exceed twice its existing loanable funds (exclusive of borrowings)
• d. Rediscounting Rate - Up to 85% of the current outstanding balance of the PNs rediscounted
• e. Interest Rate - Prevailing interest rate at the time of availment

Collateral Requirement

a. For Short Term Loan

• Working Capital - R£M or Hold-out on deposit, and/or government securities
• Rediscounting - Assignment of sub-PNs, and sub-borrowers' underlying collaterals, guarantee cover, JSS of principals, Post Dated Checks (PDCs)

b. Term Loan - RBM or Hold-out on deposit, and/or government securities

Basic Documentary Requirements

1. Certified true copy of the certificate of registration with: CDA, in case of co-ops; BSP and SEC, in case of CFIs; and SEC, in case of NGOs;
2. Certified true copy of Articles of Cooperation (for Coops), and Articles of Incorporation for CFIs and NGOs;
3. Information Sheet of the Board of Directors and Officers;
4. Board Resolution authorizing the MFI to borrow, and designating at least two (2) officers to negotiate loan with LBP and sign loan documents with their specimen signature and pictures, and
5. Audited FS for the last 3 years plus latest interim FS at the time of application.

For more information and/or assistance, please visit or call the nearest LBP Lending Centers or

Program Management Department
28th Floor, Landbank Plaza
1598 M.H. del Pilar cor. Dr. Quintos Sts., Malate, Manila
Tel Nos. (02) 522-0000, 551-2200, 405-7001 Locals: 2783 or 7427