Landbank offers loans to SMEs, MFIs
Government-owned Land Bank of the Philippines (Landbank) has opened a new loan product for small to mid-size businesses and microfinance units as financial assistance to cope with the virus pandemic.
The I-RESCUE or Interim Rehabilitation Support to Cushion Unfavorably-affected Enterprises by COVID-19 Lending Program, is a credit and loan restructuring product offered at flexible terms and conditions, said Landbank.
I-RESCUE is designed for small and medium enterprises (SMEs), microfinance institutions and cooperatives requiring assistance with their working capital amid the COVID-19 lockdown.
According to bank president and CEO, Cecilia C. Borromeo, Landbank is “ready to respond to the financial needs of enterprises hardly hit by the COVID-19 pandemic for rehabilitation support.”
“We hope that the IRESCUE Lending Program will help restore economic and social activities in our country, especially in the countryside,” said Borromeo.
The Philippines, mostly Luzon and major regions, have been on lockdown and containment measures since March 17 in an effort to halt the spread of the virus outbreak. The enhanced community quarantine is expected to end on April 30.
SMEs, microfinance institutions and cooperatives whose businesses and operations were stalled by the lockdown, may borrow up to 85 percent of working capital requirement at an interest rate of five percent per annum. The loan is payable up to a maximum of five years, with grace period on the principal payment.
Landbank said I-RESCUE can also be tapped to restructure existing loans as additional loan or avail of extended repayment period, or a combination of both. “The loan may be extended up to a maximum of 10 years, with up to three years grace period on principal and up to one year grace period on interest, depending on cash flow,” said the bank.
SMEs are any business activity or enterprise engaged in industry, agribusiness and/or services, whether single proprietorship, cooperative, partnership or corporation with total assets of ₱1.5 million up to P60 million.
Microfinance institutions provide financial services to “disavantaged people” or the low-income households. These services include taking deposits and offering loans, insurance, payments, and money transfers. Banks such as thrift and rural banks offer microfinance services, as well as cooperatives and non-governmental organizations.