Presented By:Ms. LETICIA P. VILLA

Vice PresidentLand Bank of the Philippines

LBP Programs for LBP Programs for Countryside Countryside

Financial Financial InstitutionsInstitutions

Outline of PresentationOutline of Presentation

• Grassroots Development ProgramGrassroots Development Program• CFI Calamity Assistance Program CFI Calamity Assistance Program • Agricultural Guarantee Fund PoolAgricultural Guarantee Fund Pool

1.1. LBP Credit Assistance to CFIsLBP Credit Assistance to CFIs

2.2. Available LBP Programs for CFIsAvailable LBP Programs for CFIs CreditCredit Equity InvestmentEquity Investment Other Programs & Services Other Programs & Services

3.3. Programs to be PresentedPrograms to be Presented

LBP Credit LBP Credit Assistance Assistance

to CFIsto CFIs

Industry Data of Rural Banks As of 31 August 2011

Source: BSP website

2910%

22680%

2910%

Rural BanksCoop BanksThrift Banks

Number of LBP-Assisted CFIs (284)As of 31 August 2011

As of 31 August 2011

Available LBP Programs for CFIs

1. Rediscounting Line/Easy Rediscounting Facility (Short-Term)

2. Term-Loan Rediscounting Facility3. Microfinance Program for MFI-Retailers4. Stand-by Clearing Line5. CFI Home Lending Program6. Grassroots Development Program7. CFI Calamity Assistance Program

Credit Programs

1. Capital Infusion for CFIs (2nd Tranche)

• Developmental Module

• Business Module

• Risk Recovery Program-Types 1 & 2

2. Unsecured Subordinated Debt Facility

Capital Enhancement Programs

Other Current Programs/Services

1. Clearing Arrangement with CFIs with Negotiable Order of Withdrawal Accounts

2. Correspondent Banking Line (under DSWD’s Conditional Cash Transfer Program)

Grassroots Development

Program (GDP)

Program Objectives

To encourage CFIs and MFIs to expand outreach and extend financial services in areas where there is very limited banking presence or unserved areas, and where small farmers and fisherfolk (SFFs) are not organized.

Program Mechanics

Participating CFIs or MFIs shall identify, accredit and lend to grassroots enabling partners, such as agri-business entities and non-government organizations, which will in turn, relend to SFF borrowers for livelihood activities in the hard-to-reach or identified unserved areas of LBP.

LBP GRASSROOTS DEVELOPMENT PROGRAM

(Funds Flow)

LANDBANK

CFIs & MFIs

(Rural Banks, Thrift Banks, Coop Banks, NGOs)

Grassroots Dev’t. Partners

(Agribusiness entities, NGOs)

Small Farmers &

Fisherfolk

Program Components

A. Credit To finance the term-loan working

capital of participating CFIs/MFIs for relending to SFFs by participating CFIs/MFIs.

B. Technical Assistance

To be given as incentive to the participating CFIs/MFIs in the form of trainings, enhancement of MIS database, among others

Program Features & Basic Policies

Accredited in the LANDBANK’s Rediscounting Program

With CAMELS Rating of 3.0 or better in the last two recent examinations, with no rating below 3 in any of the CAMELS block during the said examination

With Net Past Due Ratio of not more than 25%

Eligibility Criteria for CFIs

With Capital adequacy ratio (CAR) of at least 12%;

With Portfolio at Risk (PAR) of not more than 10% (for those with microfinance portfolio);

In current status with satisfactory repayment in all facilities with creditor banks;

No major BSP findings during the most recent examination

Eligibility Criteria for CFIs

Credit Facility Term Loan

Purpose Working Capital for

RelendingMaximum Loan Amount

Up to 10% of CFI/MFI’s networth based on its latest audited FS filed with BIR provided the amount is within the CFI/MFI’s borrowing capacity.

Lending Policies

Term of Loan

Maximum of three (3) years reckoned from the date of release

Interest Rate

Prevailing interest rate at the time of availment (currently priced at 5.5% p.a.), fixed for the duration of the loan

Lending Policies

Manner of Loan Release

Lump sum based on the masterlist of prospective sub-borrowers submitted by the grassroots enabling partners to CFIs/MFIs

Collaterals/Securities

Assignment of CFI/MFI’s Promissory Notes plus underlying collaterals

Assignment of proceeds of AGFP guarantee for loans extended by Grassroots Enabling Partners to small farmers and fisherfolk, if applicable

Lending Policies

Mode of Payment

Principal Payments

In equal quarterly payments to start at the end of the first quarter from the date of loan release

Interest payments

In quarterly payments based on remaining outstanding balance

Lending Policies

Pre-release Requirements

Masterlist of prospective sub-borrowers of grassroots enabling partners.

Validation of at least 20% of the total promissory notes of the sub-borrowers (aside from the bank’s standard pre-release documents)

Lending Policies

CFI Calamity Assistance CFI Calamity Assistance ProgamProgam

(CFI-CAP)(CFI-CAP)

Eligible Borrowers

CFIs affected by typhoons, disasters and natural calamities as declared by the Provincial Disaster Risk Reduction and Management Council (PDRRMC), National Disaster Risk Reduction and Management Council (NDRRMC), or by the Office of the President.

Eligibility Criteria

CFIs with loan portfolio affected by the calamity as validated by LANDBANK Lending Center;

CFIs with a capital adequacy ratio (CAR) of at least 10% prior to calamity; and

CFIs with no unrectified/uncorrected serious exceptions and/or irregularities based on the latest BSP examination and those with no arrearages prior to the occurrence of calamity.

Lending Policies

Maximum Loanable Amount

Ninety percent (90%) of the CFI’s affected portfolio, but not to exceed P5.0 M per CFI, whichever is lower

Interest Rate

Eight percent (8%) per annum

Availability Period

Within one year from the date of the declaration of the calamity by the PDRRMC, NDRRMC or OP.

Term of the Loan

Up to seven (7) years

Repayment Term

Quarterly for both principal and interest

Loan Security

Post Dated Checks

Lending Policies

Agricultural Guarantee Fund Agricultural Guarantee Fund Pool (AGFP)Pool (AGFP)

To encourage lending institutions to lend to small farmers and fisherfolk by providing guarantee cover on loan portfolio not covered by any collaterals.

Program Objectives

Eligible Participating Lending Institutions (PLIs)

Banks (e.g. Rural Banks, Cooperative Banks, Thrift Banks)

Cooperatives

Small and Medium Enterprises (SMEs) and Large Corporations such as input providers

Non-Government Organizations and Farmers’ Organizations, other than cooperatives

Eligible Sub-loans that can be guaranteed

Loans of small farmers and fisherfolk used for palay and food commodity production

Program Features Cover guarantees equivalent to 85%

of the principal loan extended by the

lending institutions (net of interest and

other charges deducted in advance)

Guarantees all risks except fraud on

the part of the conduits

Quick payment of guarantee claims

(within 15-30 days upon receipt of

complete claim documents)

Program Features

Minimal documentary requirements

for guarantee claims

Loans guaranteed by the AGFP

shall carry a risk-weight of 20%

(per BSP Circular No. 713)

Claims Procedure

80% of claims to be paid within 15 days from application/ submission of claim documents

Remaining 20% to be paid within 30 days after the conduct of validation.

Guarantee Fee

2% per annum based on the amount of the loan extended by the PLIs to eligible sub-borrowers

Ang Bangkong May Damdaming Bayan

“One may walk over the highest mountain one step at a time.”

Thank you