Landbank simplifies lending to farmers
Government-owned Landbank of the Philippines is targeting to make direct lending programs more accessible and affordable for the agriculture sector as it simplifies its loan requirements.
“We understand that applying for loans can be intimidating, especially for small farmers and fishers, so we have started making basic improvements in our processes to make it easier for them to avail of loans,” Landbank president and CEO Cecilia Borromeo said.
Among the basic enhancements which Landbank made is the simplification of the loan application form, which has been condensed into one document – from what used to be three separate documents including application form, sworn statement and data privacy consent.
Completing the form is also now more straightforward with mostly tick boxes, to make it easier for farmers and fishers. The promissory note, which used to be a 14-page document has also been simplified and shortened to one page.
Basic documentary requirements have likewise been trimmed. Borrowers of the Agricultural Competitiveness Enhancement Fund, for instance, will only need to submit a loan application form, a simple farm plan, and barangay clearance.
Landbank said it has made its programs more affordable by standardizing the interest rates at five percent per annum for most direct lending programs such as the Accessible Funds for Delivery to Agrarian Reform Beneficiaries program, which provides loans to finance production of rice, corn, and high-value crops, as well as the acquisition of small farm implements.
Retail lending programs that Landbank administers for the Department of Agriculture also now have interest rates fixed at two percent.
Also available at an interest rate of two percent is the Expanded Rice Credit Assistance under the Rice Competitiveness Enhancement Fund where it will lend up to P500 million annually for the next six years to rice farmers registered in the Registry System on Basic Sectors in Agriculture and DA-accredited cooperatives.
Processing of loan applications is also quicker – with average turn-around time of just one day as against the maximum 10day commitment to the Governance Commission for GOCCs. This, however, will depend on the borrower’s submission of complete documents and the outcome of the credit and background investigation.
“This is just the beginning as we are actively looking for ways to further improve the loan application process and we hope to encourage them to go to Landbank instead of borrowing from informal lenders who charge significantly higher rates,” Borromeo said.