Landbank launched a new credit facility that aims to support small farmers and MSMEs specifically producing cacao, coffee, coconut, and processed fruits and nuts.
According to a statement by Landbank of the Philippines, the credit facility will be managed in partnership with the Department of Trade and Industry (DTI) and the latter will "endorse beneficiaries qualified to borrow under the facility that include cooperatives, farmers’ associations and organizations, nongovernmental organizations (NGOs), and MSMEs."
This new credit facility will provide financial assistance to increase the incomes of small farmers and to provide employment opportunities to those in Eastern Visayas and Mindanao.
“The newly launched credit facility is in support of the Rural Agro-enterprise Partnership for Inclusive Development and Growth (RAPID Growth Project) implemented by the DTI and funded by the International Fund for Agricultural Development," the statement read.
Here are more details about this development:
- borrowers can avail up to 90% of the project cost, net of matching grant from the DTI
- the loan has a 5% per annum fixed interest rate for the first three years to fund production costs, machinery, facility, and equipment.
Projects eligible for funding include:
- production of crops such as cacao, coconut, coffee, and processed fruits and nuts;
- development of new plantation, replanting, rejuvenation, and rehabilitation of old trees;
- establishment of nursery gardens;
- post-harvest activities such as fermentation and drying;
- processing or manufacturing such as roasting, grinding or milling, packaging and storing;
The loans will be payable according to the crop cycle or gestation and payback period of the project, while loans for acquiring fixed assets such as machinery can be paid based on project cash flow. The loans will also be used as permanent working capital are payable up to three years, while loans for working capital are payable up to one year.