Innovative Financing Schemes – Special Agricultural Financing Window (IFS-SAFW)(IFS-SAFW) Department of Agriculture Cebu City in coordination with Land Bank of the Philippines Quedan Rural Credit & Guarantee Corp. AGRICULTURAL CREDIT POLICY COUNCIL

SPECIAL AGRICULTURAL FINANCING WINDOW (SAFW) Lending Agents A credit line/rediscounting facility designed to encourage rural lending agents to lend to collateral-short small farmers and fisherfolk. Eligibility CriteriaFinancing FacilitiesLoan Ceiling Eligible Sub-borrowersEligible ProjectsInterest Rates Loan MaturityCollateral RequirementsProcedures

Lending Agents  Banks  Cooperatives  Agri-Based Enterprises  Non-Government Organizations, People’s Organizations and other Institutions with juridical personality

Eligibility Criteria  Banks  Risk Asset Ratio (RAR) of not less than12%;  Past due rate of not more than 25%;  Profitable operations for the last three years;  Not experiencing liquidity problems;  No serious irregularities and exceptions found per latest BSP and LBP examination; and,  With no outstanding past due obligations with its creditors. more …

Eligibility Criteria…  Cooperatives  Registered with the Cooperative Dev’t Authority;  With lending experience equivalent to at least three years;  Past due rate of not more than 25%;  With written policies, systems and procedures on lending, accounting and bookkeeping and with installed books of accounts;  With a Core Mgt. Team composed of at least a full-time manager, duly bonded treasurer and bookkeeper;  With installed Capital Build-Up and Savings Mobilization Program; and,  With no outstanding past due obligations with its creditors. more … previous

Eligibility Criteria…  Agricultural-Based Enterprises  Profitable for the past three years;  No ownership dispute for three years;  No major labor dispute for the past three years;  No adverse findings on the owners and management;  Debt to equity ratio should not exceed 80:20; and,  At least 60% Filipino owned if corporation and 100% Filipino owned if single proprietorship. more … previous

Eligibility Criteria…  NGOs, POs & other Institutions  Registered with the Securities and Exchange Commission or other registering government entity;  With lending experience equivalent to at least three years;  Past due rate of not more than 25%;  With written policies, systems and procedures on lending, accounting and bookkeeping and with installed books of accounts;  With a Core Mgt. Team composed of at least a full-time manager, duly bonded treasurer and bookkeeper; and,  Authorized to borrow and lend under its Articles of Incorporation or Charter (in case of State Colleges or Universities) previous

Financing Facilities  Rediscounting Line for Banks Promissory notes issued by qualified sub-borrowers of banks under this program can be rediscounted up to 100% of the face value  Credit Line or Rediscounting for all other types of Lending Agents Eligible cooperatives, ABEs, NGOs/POs and other institutions could avail of a rediscounting line or credit line from the program.

Loan Ceiling  Credit line/Loan Limit to Lending Agents Lending AgentFacilityLoan Limit 1.Banks RediscountingTotal rediscounts shall not exceed the Allowable Expansion Limit on Risk Assets 2.CoopsRediscounting and/ or Credit Line Amount inclusive of existing obligations shall not exceed 6 times the net worth 3.NGOs/POs Credit LineAmount should be equal to requirement of borrowers but not to exceed twice its existing loanable funds (exclusive of borrowings) 4.ABEs Credit LineAmount not to exceed 75% of the appraised value of the collateral 6 times its net worth, whichever is lower  Loan limit for Sub-Borrowers The loan amount shall depend on the type of the project to be undertaken by the individual sub-borrower but not to exceed P150, per sub-borrower.

Sub-Borrowers Eligible sub-borrowers are small farmers and fisherfolk who are not existing borrowers of any of the lending agents

Eligible Projects agricultural crop production Livestock Poultry fishery projects and payment for farm services (labor, animal, machines).

Interest Rates  LANDBANK to Lending Agents  Lending Agents to Sub-Borrowers The pass-on rate to sub-borrowers shall include a reasonable spread for the lending agent. Banks (except Commercial and Universal Banks) Commercial & Universal Banks, Coops, ABEs & NGOs/POs 91-day T-Bill Rate at the time of availment plus 1% 10% plus 2% service fee

Loan Maturity & Mode of Payment The loan maturity and mode of payment for each type of lending agent shall be based on LBP’s existing policies and guidelines; and, The lending agents’ existing policies and guidelines on loan maturity and mode of payment shall be applied to sub-borrowers’ loans.

Collateral Requirements  For ABEs - Real Estate Mortgage; Chattel Mortgage; and/or other acceptable securities  For all other Lending Agents Loans to all other lending agents shall be secured by any or a combination of the following: For Rediscounting – Deed of Assignment of Promissory Notes of sub- borrowers together with the underlying securities which include, but not limited to crop insurance and QuedanCor guarantee coverage. For Credit Line – Assignment of crop insurance and/or QuedanCor guarantee coverage; Real Estate or Chattel Mortgage; or other acceptable securities.

Procedures  Lending to qualified agents The loan policies and guidelines in LBP’s existing Codified Approving & Signing Authority as well as other relevant policies, guidelines and procedures of LBP shall be applied to the ff: accreditation of qualified lending agents; processing and approval of loan application; and, program fund disbursement and recovery. Additional procedures and requirement may be required by LBP. more …

 On-lending to qualified sub-borrowers The existing lending policies, guidelines and procedures of the lending agents shall be applied in its lending operations under the SAFW.  QuedanCor Guarantee Availment of special guarantee is subject to QuedanCor’s approved implementing guidelines for the IFS. Procedures… previous