Loans released by Land Bank of the Philippines (LBP) to small farmers, micro-enterprises, agriculture and aquaculture business grew 35 percent to P331.3 billion in 2014 from P244.6 billion in the previous year, a top official said on Friday.
Gilda Pico, LBP President and Chief Executive Officer, said the loans were part of releases to its priority sector aimed at promoting economic growth in the rural areas.
“Enabling the growth of our priority sectors remains a priority for us at Land Bank as we are committed to extending financial and technical assistance to those who need it most.” Pico said.
“This is also in line with our continuing thrust to support the national government’s efforts to promote inclusive growth,” she said.
The priority sector loans represent a record-high share of 85.9 percent of the bank’s total loans to all sectors of P385.8 billion. The top borrowers were in agri-business, micro-enterprises and small and medium scale enterprises, low-cost housing, and agri-aqua projects of local governments.
The priority sectors mainly involve farmers, fishermen and agrarian reform beneficiaries, who are members of their respective associations. Projects of local government units and government-owned corporations for small enterprises, including agri-aqua businesses also fall under the category.
Pico said releases to small farmers and fishermen increased 13 percent to P58.4 billion from P51.6 billion and were channeled through 793 cooperatives, 206 countryside financial institutions and 226 irrigators’ associations.
She said loans to micro-enterprises and SMEs grew to P51.4 billion from P37.5 billion; loans to utilities sector, P52.1 billion from P42.1 billion; loans for socialized, low cost, and medium cost housing to P37.3 billion from P27.1 billion.
Pico attributed the expansion of the loans to consistent efforts to further strengthen its credit support, particularly to key sectors and projects with high development impact.
She said the bank will step up direct lending to farmers and fishers who are not members of accredited cooperatives and are unable to secure loans from lending institutions on their own.
Land Bank, in partnership with the Department of Agriculture and the Department of Agrarian Reform, will channel financial support to the agricultural sector in pursuit of the government’s thrust towards improved agricultural productivity.
“We continue to intensify our support and to work hand in hand with our partners to provide the needs of the agricultural sector and fulfill our self-sufficiency goals,” she said.
By providing individual borrowers with direct access to credit, the bank could help increase the farmers’ productivity and income.
‘Sikat Saka’ Program
The Sikat Saka Program provides direct access to credit for small palay farmers, who are not yet members of LBP-assisted cooperatives.
Most of the country’s palay farmers have no access to formal credit and depend on informal lenders that charge exorbitant interest rates. As of December last year, Php 1.2 billion in loans was released to 5,904 farmer-borrowers under Sikat Saka. Through the program, the income of each farmer-beneficiary increased by roughly 65 percent per annum per hectare.
The Program also offers integrated support such as irrigation, training, market, extension and administrative services. Program beneficiaries are trained on credit discipline and financial management, teaching them tosave, pay loans on time, and better manage their finances.
Sikat Saka was pilot-tested in 2012 in major rice-producing provinces like Nueva Ecija, Isabela, Iloilo and North Cotabato, and is now expanded to cover 45 provinces in the country.
The Agrarian Production Credit Program makes credit and other necessary interventions more accessible to Agrarian Reform Beneficiaries Organizations (ARBOs). It is a transition credit program designed to help prepare ARBOs to become credit conduits of the Bank under the regular lending window.
As of end-2014, Land Bank has released P 917.8 million in loans benefiting more than 15,000 farmers nationwide. Funded projects include production of sugarcane, palay, corn, pineapple and potato.