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Presented By:Ms. LETICIA P. VILLA
First Vice PresidentLand Bank of the Philippines
LBP Programs LBP Programs and Services to and Services to
Countryside Financial Countryside Financial Institutions Institutions
Outline of PresentationOutline of Presentation
1.1. LBP Credit Assistance to Countryside LBP Credit Assistance to Countryside Financial Institutions (CFIs)Financial Institutions (CFIs)
2.2. Grassroots Development ProgramGrassroots Development Program Credit ComponentCredit Component Technical Assistance ComponentTechnical Assistance Component
3.3. CFIEP’s Capability Building Support to the Rural CFIEP’s Capability Building Support to the Rural Bankers Association of the PhilippinesBankers Association of the Philippines
4.4. Available LBP Programs and Services for CFIsAvailable LBP Programs and Services for CFIs CreditCredit Equity InvestmentEquity Investment Other ServicesOther Services
LBP Credit LBP Credit Assistance Assistance
to CFIsto CFIs
Industry Data of Rural Banks As of 31 December 2011
Source: BSP website
49.9%
Number of LBP-Assisted CFIs (323)
Rural Banks
Coop BanksThrift Bank
As of 31 December 2011
As of 31 December 2011
Rural Banks
Coop Banks
Thrift Banks
Volume of Loans (P17,118 M)
Grassroots Development
Program (GDP)
Program Objectives
To encourage Countryside Financial Institutions (CFIs) and Microfinance Institutions (MFIs) to expand outreach and extend financial services in areas where there is very limited banking presence or unserved areas, and where small farmers and fisherfolk (SFFs) are not organized.
Program ComponentsA. Credit
To finance the term-loan working capital of participating CFIs/MFIs for relending to SFFs by participating CFIs/MFIs.B. Technical Assistance
To be given as incentive to the participating CFIs/MFIs in the form of trainings, enhancement of MIS database, among others
Credit Component of
the GDP
LBP GRASSROOTS DEVELOPMENT PROGRAM
(Funds Flow)LANDBANK
CFIs & MFIs
(Rural Banks, Thrift Banks, Coop Banks, NGOs)
Grassroots Enabling Partners
(Agribusiness entities, NGOs)
Small Farmers &
Fisherfolk
Program Features & Basic Policies
Accredited in the LANDBANK’s Rediscounting Program
With CAMELS Rating of 3.0 or better in the last two recent examinations, with no rating below 3 in any of the CAMELS block during the said examination
With Net Past Due Ratio of not more than 25%
Eligibility Criteria for CFIs
With Capital adequacy ratio (CAR) of at least 12%;
With Portfolio at Risk (PAR) of not more than 10% (for those with microfinance portfolio);
In current status with satisfactory repayment in all facilities with creditor banks;
No major BSP findings during the most recent examination;
Eligibility Criteria for CFIs
Agri-Business Entities (ABEs)
Non-Government Organizations, which may include church-based organizations
Eligible Grassroots Enabling Partners(GEPs)
For Agri-Business Entities
With license/permit to operate business or a commercial activity with agri-based component in the unserved area;
Operating in the underved area in the last two (2) years;
With permanent office/address and has been holding office in the said address in the last three (3) years;
No adverse information on the principals
Eligibility Criteria for GEPs
For Non-Government Organizations
With permanent office/address and has been holding office in the said address in the last three (3) years;
With dedicated individual/staff to run and manage the relending program
Eligibility Criteria for GEPs
Credit Facility
Term Loan
Purpose
Working Capital for Relending
Maximum Loan Amount
Up to 10% of CFI’s networth based on its latest audited FS filed with BIR provided the amount is within the CFI’s borrowing capacity.
Lending Policies
Manner of Loan ReleaseLump sum, based on the masterlist of prospective sub-borrowers submitted by the GEPs to CFIs
Term of the LoanMaximum of three (3) years reckoned from the date of release
Interest Rate
Prevailing interest rate at the time of availment, fixed for the duration of the loan.
Lending Policies
Collaterals/Securities
• Assignment of CFI’s promissory notes plus underlying collaterals
• Assignment of proceeds of AGFP guarantee for loans extended by GEPs to small farmers and fisherfolk, if applicable
Lending Policies
Techical Assistance
Component of the GDP
Purpose of the TA Fund
Institutional support for credit conduits and grassroots enabling partners;
Business development and organizational strengthening assistance to sub-borrowers.
Operating Policies
1. The grant shall be provided for a maximum of two (2) years, reckoned from date of loan release from LANDBANK;
2. The amount of the TA shall not be more than 10% of the total loan release or P2.0 Million per conduit;
3. The grant shall be on a reimbursement basis which shall be provided at the end of one year of engagement;
Coverage…cont’d Technical Assistance
Institutional Support Salary subsidy of one staff equivalent to 50% of monthly salary and allowance but not more than P7,000.00 per month;
Acquisition of transport facilities (motorcycles) by the conduits;
Installation of MIS including credit policies, systems and procedure for grassroots enabling partners;
Staff development training for eligible conduits and grassroots enabling partners;
Coverage..cont’d
Business and Organizational Development Training on enterprise/livelihood activities for the
sub-borrowers;
development training for the formation of SFF cooperatives
CFIEP’s
Capability Building Support to RBAP
The CFIEP Technical Committee (TC) The CFIEP Technical Committee (TC) has approved on 09 May 2012 during has approved on 09 May 2012 during its meeting the its meeting the 70%70% (CFIEP) – (CFIEP) – 30%30% (RB) sharing on the training cost in (RB) sharing on the training cost in the conduct of Corporate the conduct of Corporate Governmance seminar.Governmance seminar.
CFIEP alloted a budget of P600,000 for CFIEP alloted a budget of P600,000 for the conduct of at least eight (8) the conduct of at least eight (8) batches of trainings with 40-50 batches of trainings with 40-50 participants per batch until December participants per batch until December 20122012..
Available LBP Programs for CFIs
1. Rediscounting Line/Easy Rediscounting Facility (Short-Term)
2. Term-Loan Rediscounting Facility3. Microfinance Program for MFI-Retailers4. Stand-by Clearing Line5. CFI Home Lending Program6. CFI Calamity Assistance Program
Credit Programs
1. Capital Infusion for CFIs (2nd Tranche)
• Developmental Module
• Business Module
• Risk Recovery Program-Types 1 & 2
2. Unsecured Subordinated Debt Facility
Capital Enhancement Programs
Other Current Programs/Services
1. Clearing Arrangement with CFIs with Negotiable Order of Withdrawal Accounts
2. Correspondent Banking Line (under DSWD’s Conditional Cash Transfer Program)
3. Agricultural Guarantee Fund Pool
End of Presentation
THANK YOU…