Programs to Coops

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Programs to Coops
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Presentation Outline

• Coop Financing Programs
• Regular Lending Windows
• Special Lending Windows

• Technical Assistance
• Technology Promotion Center
• B2B
• Capacity Building

• Gawad sa Pinakatanging Kooperatiba (Gawad PITAK)

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Regular Lending Windows
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Eligible Borrowers

• 1. Agricultural Cooperatives composed of
  majority of
• Small Farmers
• Owner, cultivators, tenants, leaseholders, etc.
  actually tilling not more than five (5) hectares
  of agricultural land
• Small Fisherfolks
• Owner or operator of not more than 3 gross tons
  of fishing boat paraphernalia fishing
  activities/operations within a 25 km radius from
  the shoreline
• Owners/operators of not more than five (5)
  hectares including those under Fishpond Lease
  Agreement and
• Workers of fishing boats and fishponds

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Eligible Borrowers

• Small Hog/poultry/livestock raisers
• With initial maximum inventory of
• Poultry - 1,000 layers/broilers
• Swine - 10 sow level or 20 fatteners
• Cattle - 10 fatteners or 5 breeders
• Dairy - 10 milking cows
• Goat - 50 heads
• Wives and children of age of small
  farmers/fisherfolks/raisers who are members of
  cooperatives
• 2. Non-farmers Credit Cooperatives composed of
  market vendors, employees, teachers, rural
  workers, etc.

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Loan Purpose

• Agricultural Production Loan (APL) -

short/medium/long term loans (depending upon the
gestation period of the crop/project) for
relending to cooperative members intended to
finance crop production, livestock and poultry
raising/breeding, fishery and aquaculture
projects and other agri-aqua-related projects,
including cottage industries which utilize excess
farm labor.
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Loan Purpose

• Working Capital Loan (WCL) -

Intended to finance co-op activities requiring
operating capital for the purchase of raw
materials, processing and trading of inputs
and/or finished products and the operation of
fixed assets.
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Loan Purpose

• Rediscounting Line (RL) -

Rediscounting of promissory notes of members of
cooperatives.

• Fixed Asset Acquisition Loan (FAL) -

Purchase of fixed assets to be used in the
co-ops operation.
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Loanable Amount

• Depends on the project needs or loan ceilings for
  traditional and high-value crops which should not
  exceed 80 of the project cost.
• For rediscounting maximum of 85 of the face
  value of the sub-promissory notes.

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Interest Rates
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Interest Rates
1. For Class A and B Coops
1.1. STL (except microfinance loans)
Prime Rate
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Interest Rates
1.2. Term Loan plus 1 premium in the
resulting/final interest rate
based on the previous table presented.
1.3. All production loans with more than one (1)
year term (e.g. sugarcane, pineapple,
banana, oil palm, rubber, coffee, swine
breeding, etc.) will be priced like term loan.
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Interest Rates
2. For Key Coops (KCs) the interest rate will
be less 1 in the final/resulting interest
rate, based on the table presented.
3. For the Class C, D and newly accessing coops
regardless of the type and security, the
interest rate shall be as follows
- STL - Prime 5 spread - TL -
Prime 6 spread
4. The interest rate will be fixed for the
duration of the promissory notes.
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Co-op Eligibility Requirements

• Must be duly registered with Cooperative
  Development Authority (CDA).
• Minimum of 60 members composed of small
  farmers/fisherfolks and non-farmers.
• Minimum paid-up share capital of P 30,000.00.
• All members should have attended pre-membership
  education seminar (PMES).
• With a core management team composed of
  qualified, duly bonded part-time or full-time
  Treasurer/Cashier and qualified full-time
  Bookkeeper and Manager.

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Co-op Eligibility Requirements

• With an on-going savings mobilization program
  resulting to an annual average increase of
  savings of at least P 500/member.
• With an on-going capital build-up program
  resulting in annual incremental equity equivalent
  to P 500 per member.
• With written policies, systems and procedures on
  membership management, capital build-up and
  savings mobilization, credit, accounting and
  budgeting and written plans and programs.

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Co-op Eligibility Requirements

• With duly installed books of accounts.
• At least break-even in its operations.
• Must be conducting periodic performance review of
  operations.
• Has risk asset ratio of not less than 10.
• Past due ratio of not more than 15 for credit
  coops and not more than 25 for Bank-assisted
  co-ops (BACs)/Newly accessing cooperatives
  (NACs).

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Special Lending Windows
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Development Advocacy (DevAd) Program

• Objectives
• To expand financing services to mandated (SFF)
  and priority
• (MSMEs) clients
• Develop new lending approaches and
  methodologies that suit
• the requirements and characteristics of SFF
  and MSMEs

• Program Features
• Make use of non-traditional lending
  modalities (e.g. receivable
• or PO financing)
• Make use of credit enhancement instrument
  (e.g. marketing
• contracts, guarantee covers, PDCs)

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Development Advocacy (DevAd) Program
Eligible Borrowers

• Cooperatives
• Federations
• Associations
• Non-Government Organizations
• Small and Medium Enterprises
• Agri-Business Entities

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Development Advocacy (DevAd) Program
Loan Purpose

• Production Loan
• Working Capital
• Fixed Asset Loans

Loanable Amount

• Loanable amount shall depend on the requirement
  of the project.
• Loans against receivables and POs shall not
  exceed 70 of the receivables and PO value
  respectively

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Rice Productivity Program
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• Rationale/Background
• Consistent with the governments effort to
  achieve food sufficiency
• LANDBANK committed to extend at least P5 billion
  in loans to support rice production
• LANDBANK introduces policy adjustments and
  incentive packages for the conduits

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• Objectives
• To intensify LANDBANKs support to increase rice
  production
• To encourage conduits to increase their loan
  portfolio for rice production and
• To develop new lending conduits initially for
  rice production

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Policy Statement
General Lending Approach/Track
LANDBANK
New/Non-Traditional Conduits
Existing Conduits

• BACs
• CFIs

• FOs (IAs, etc.)
• Church-based Orgns
• SMEs (Ricemillers/Rice Traders, etc.)

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Loan Amount
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Interest Rate
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Other Provisions for New Conduits (to be covered
by a new issuance)
Minimum Eligibility Criteria (for New Conduits)

• Duly registered with SEC or other government
  registering body
• Attendance of the interested rice farmer-members
  and officers of the conduit to the values
  orientation seminar to be conducted by DAC
• Presence of manager, bookkeeper and treasurer
• Willingness to institute savings mobilization
  program among the members (applicable for the
  second loan availment)
• Should have at least thirty (30) availing rice
  farmers
• Presence of loan disbursement and collection
  system
• No adverse findings on the core management team
  (manager, bookkeeper, and treasurer)
• Execution of plan of payment by the individual
  rice farmers with past due accounts with
  LANDBANK, if any.

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AGRICULTURAL GUARANTEE FUND POOL (AGFP)
Encouraging financial institutions and other
credit conduits to lend to small farmers and
fisherfolk by providing guarantee cover to
unsecured palay and other food production loans
extended to farmers.
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Program Background

• Established in compliance with Administrative
  Order No. 225-A issued by President Arroyo on 26
  May 2008
• GOCCs and GFIs are mandated to allocate and
  contribute to the AGFP five percent (5) of their
  2007 surplus for projects in rice and other food
  production
• AGFP shall encourage financial institutions and
  other credit conduits to lend to small farmers
  and fisherfolk by providing guarantee cover to
  loans, not covered by any collateral.

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Eligible Conduits

• 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

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Eligibility Requirements for Credit Conduits
For Cooperatives

• Must have satisfactory credit standing with
  creditors
• Must have past due ratio of not more than 15 for
  credit coops and 25 for non-credit coops
• Must have at least three-year track record in
  lending/financing to farmers or at least one year
  track record in lending/financing to farmers, for
  cooperatives with satisfactory credit record
• Must have a risk asset ratio (for credit
  cooperative) of not less than 10
• Must have complete part/full time core management
  team
• Must be profitable on the year preceding the
  application and as of the time of application for
  guarantee line
• Must have no adverse findings on background
  investigation on officers and management.

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Eligibility of Sub-borrowers for Guarantee Cover
Small farmers and fisherfolk engaged in food
crops/ commodities production.
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Eligible Accounts for Guarantee Cover
Unsecured loans/accounts of eligible
sub-borrowers not covered by any collateral

• whose loan purpose is to finance palay and other
  food crops/commodities production and
• those loans/accounts which were released not more
  than 45 days prior to request for guarantee
  coverage, provided there is no damage to the crop
  at the time of application of guarantee cover.

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Guarantee Coverage
Up to 85 of the principal eligible loan/account
actually disbursed by the credit conduit to
sub-borrowers, net of interest and other charges
deducted in advance, but not to exceed the amount
of credit ceiling per commodity as set by the
AGFP Governing Board.
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Guarantee Fee
For Credit Conduits sub-notes that will be
covered by guarantee, the credit conduit shall
pay two percent (2) guarantee fee per annum on
the amount of the eligible loan/account for
guarantee coverage. NOTE 2 guarantee fee is
for 2009 only. GF subject to annual review by
the GB.
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Guarantee Line Approval and Renewal

• A guarantee line shall be established for an
  eligible credit conduit, subject to the approval
  by the Program Management Committee or by the
  Governing Board (within its designated
  authority). The line shall be the maximum amount
  of guarantee cover that can be extended to the
  credit conduit at any given time.

Maximum Guarantee Line is computed as follows
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Guarantee Line Approval and Renewal (cont)

• A guarantee line shall be valid for a period of
  one year. The renewal shall be based on the
  performance of the credit conduit. Performance
  standards per credit conduit category shall be
  set by the Governing Board.

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TECHNOLOGY PROMOTIONS CENTER PROGRAM
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TECHNOLOGY PROMOTION CENTER (TPC) PROGRAM

• Promotion of appropriate, updated and proven
  viable technologies
• production and post-production efficiencies, and
• guarantee increase in farmers income and
• Enhance the BANKS lending programs thru
  validated technologies for adoption of rural
  farmers and entrepreneurs.

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• EXPANDED TPC PROGRAM
• Technology sources other than SUCs - private
  companies government agencies with technology
  generation promotion function
• Regions/ areas w/o TPC tie-up with SUCs can
  propose for technology validation

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TPC Program Structure
FUNCTIONS
PROGRAM STEERING COMMITTEE

• Defines program thrust and direction, including
  policies and guidelines
• Deliberates and approves proposals,
• Monitor and evaluate overall program
  implementation
• Resolve issues and concerns elevated by the PMC.

Chair EVP- ADBS Members Branches Group
Heads Head, PMG Secretariat DAD
PROGRAM MANAGEMENT COMMITTEE

• Identifies and evaluates technologies for
  validation and promotion
• Recommends annual plan and budget
• Monitors field level program implementation
• Resolve operational issues and concerns.

Chair Regional/Area Head Members Head, DAC
Head, LC
Head, Servicing Branch
Head, DAD Representatives,
Partner Agencies Secretariat DAC
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EXISTING TPCs
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EXISTING TPCs
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Strategic E-Commerce Program
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BACKGROUND

• Program was launched with the following
  objectives
• Providing relevant market information and
  improving direct market access
• Offering an added business for the co-ops.

• Program road shows and training conducted
  nationwide to inform and educate target
  beneficiaries
• - more than 400 BACs trained,
• - P1.6 Billion products posted on-line

• LBP invested in B2B thru the ACCESS program
• DACs provided with PCs for the program
• - to update product postings of BACs and
  facilitate market transactions.

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STRATEGIC E-COMMERCE PROGRAM

• The B2Bpricenow.com is a website where farmers,
  SMEs can post, canvass, negotiate and transact on
  line It is free of charge
• FEATURES
• On-line transaction members can post/ canvass
  products negotiate close contract
• Canvass of price thru mobile phone
• Availability of customized market information
  members can download info on product, suppliers,
  buyers, price data, etc.
• E-bulletin of trade association trade
  association profiles and events are posted
• Access to technology commodity information

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LAND BANK OF THE PHILIPPINES
Strategic E-Commerce Program
Website Features
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Development Assistance Delivery Mechanism The
Roles of DAD, DAC and the LC
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Development Assistance Centers
Branches Group
Development Assistance Department
Regional/Area Office
Development Assistance Center

• Formulation of KRA, PES and staffing parameters
• Validation of targets, particularly on co-op
  upgrading
• Capability-building support
• Assistance in program implementation

ED/IB Unit
OR Unit

• Functions (S.O. 455 s. 2001)
• Institution-building for co-ops and CFIs
• Technical and market assistance for co-ops, CFIs
  and SMEs
• Operations review of co-ops

• Co-op Recovery/Rehabilitation
• Development Assistance Resource Complementation
• DAC Operations Review rating

• KRA
• SFF Access to Credit
• Implementation of Expanded/ Diversified/Innovative
  Projects
• Co-op Risk Reduction Mgt

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Lending Center
Branches Group
Development Assistance Department
Regional/Area Office

• Technical assistance
• - technical evaluation of loan proposals

Lending Center

• Functions (S.O. 455 s. 2001)
• Processing and monitoring of all commercial and
  agrarian loans (except salary and back-to-back
  loans)
• Credit investigation/property appraisal
• Loan collection
• Management and disposal of ROPAs

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Gawad PITAK 2009
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OBJECTIVES

• To give recognition to cooperatives with
  significant contribution to their members,
  community and other cooperatives.

• To give recognition to cooperatives that have
  become models of excellence in the performance of
  their operations.

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HISTORY
1990
Search for Outstanding Cooperative
1993
renamed as Gawad sa Pinakatanging Kooperatiba
(Gawad PITAK)
1999
The non-agri-based and Class B cooperatives were
included in the annual search
2003
Additional special awards were given to
cooperatives participating in LBPs various
programs
2004
Giving of special award for Institution-based
Cooperatives
2005

• Giving of additional special awards for
• Outstanding Small Fisherfolk Cooperative
• Outstanding ARB Cooperative

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HISTORY
2007
Giving of additional special award for
Outstanding Cooperative in Micro Finance
Operations
Inclusion of Assistance to SFF Micro Small
Entrepreneurs Criteria
2008
Inclusion of Environmental Protection
Management, Marketing Linkages, Support Services
to other Coops and Attendance to Coop Summit
other conferences in the Impact Criteria
2009

• Expanded the GP Awards developed corresponding
  guidelines for
• Ginintuang GP for Cooperative Rural Bank
  Category
• Special Award of Outstanding Electric
  Cooperative
• Special Mention Award for Best in Environmental
  Protection Management

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PRIZES
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PRIZES
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PRIZES
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PRIZES
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PRIZES
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PRIZES
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Gawad PITAK 2009 Winners
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Gawad PITAK 2009 Winners
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Gawad PITAK 2009 Winners
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Gawad PITAK 2009 Winners
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Gawad PITAK 2009 Winners
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GP WINNERS
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Some men have thousand reasons why they cannot
do what they want to, when all they need is one
reason why they can
Wellis R. Whitney
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THANK YOU!