Land Bank Offers ‘Out-Of-The-Box’ Easy Loans For Farmers,Fisherfolk and Small Entrepreneurs

The Land Bank of the Philippines (LandBank) has opened “out-of-the-box” lending facilities for farmers, fisherfolk, and inventors along with small and micro entrepreneurs, especially in remote or unserved areas. This is in compliance with President Rodrigo Duterte’s directive to capacitate small and medium enterprises.

These new facilities include the Empowering Barangays in Remote Areas through Credit and Enterprise (EMBRACE) with an initial fund of P1 billion and which is designed to serve the financing needs of small farmers, fishers, and micro and small entrepreneurs.

“LandBank has recently implemented EMBRACE in support of its continuing commitment to the government’s goal on financial inclusion as a means to achieve inclusive growth,” the LandBank said in a report.

Another “out-of-the-box” financing package available at the Bank is the Innovation and Technology (I-TECH) Lending Program which serves patented Filipino inventors who want to commercialize their inventions, LandBank said.

The bank did not specify in this report how much was initially allotted for I-TECH, but it said the Bank will work with the Technology Application and Promotion Institute (TAPI) on the features of this lending program, which aims to “make available a special financing window” for Filipino inventors.

EMBRACE aims to target 1.2 million small borrowers who are seeking financing for their projects that involve agricultural crop, livestock and fishery production, agri-enterprise and other livelihood initiatives.

The program covers 84 unserved municipalities in Luzon, 33 in the Visayas and 112 in Mindanao.

Small borrowers can each avail of a minimum loan of P25,000 and a maximum of 80 percent of their total project costs, but not to exceed P500,000 under this lending program.

In the I-TECH program, state colleges and universities with patented inventions and enterprises authorized by inventors to use their patents through a Deed of Assignment can also avail of the financing package.

Earlier, Dominguez, other Cabinet officials and members of the Congress had signed the Implementing Rules and Regulations of a new law that aims to provide aspiring small entrepreneurs who would otherwise be considered as “unbankable” by traditional lending sources, with easily accessible loan facilities through accredited non-government organizations (NGOs) that exclusively provide micro finance services to small enterprises.

Qualified micro finance NGOs are eligible for preferential tax treatment of 2 percent tax—in lieu of national taxes—based on their respective gross receipts from micro finance operations under the IRR of Republic Act No. 10693, or the Microfinance NGOs Act.

Thus, poor families considered as “unbankable” loan clients can now tap government funding to open up small businesses by accessing credit facilities provided by micro finance NGOs.

One key feature of RA 10693’s IRR is the set of guidelines on the creation of a Micro finance NGO Regulatory Council, which is tasked to accredit NGOs that provide financial products and services to small entrepreneurs.

This new law is attuned to President Rodrigo Duterte’s 10-point socioeconomic agenda designed to sustain the economy’s high growth path and make its benefits felt by all Filipinos.

To keep LandBank’s primary function of serving the agriculture sector and small and micro enterprises, Dominguez has recommended that the government drop its plan to merge LandBank with the Development Bank of the Philippines (DBP).

The Governance Commission for Government-Owned and Controlled Corporations (GOCCs) had already resolved to cancel the implementation of Executive Order No. 198 issued by former President Aquino on the DBP-LandBank merger.

Dominguez and Budget Secretary Benjamin Diokno, who both sit as ex-officio members of the GCG, were among the signatories to the resolution of the Governance Commission scuttling the merger of the state-owned banks.

According to Dominguez, the merger would not serve the public interest because the two institutions have two distinctly different functions.

A former agriculture secretary, Dominguez noted that the LandBank serves the agriculture sector, while the DBP takes care of the needs of industry.

Dominguez pointed out that the DBP is mandated to provide long-term financing, which is markedly different from the skills that are needed to extend short-term credit to farmers—the LandBank’s primary job.

He also noted that the two banks were set up through legislation, and, thus, only a law could legalize their merger.

LandBank was created through Republic Act 3844, while the DBP was originally named the Rehabilitation Finance Corporation under RA 85. (DOF)