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The Aklan Coop Bank and the United Coconut Planters Bank (UCPB) got
spooked by liquidity problems at about the same time. As it was the
natural reaction of banks in need of a lifeline, both pleaded for
mercy and the requisite bailout measures.
The response of monetary authorities to the SOS
from UCPB was swift. It came in the form of a grand P30-billion
rescue from the central bankers. With the P30-billion fund, the UCPB
can nurse itself back to health, at least that was the expectation
of those who readily approved the huge bailout.
The Aklan Coop Bank’s plea for a bridge fund
to prevent the shutdown fell on ears that would not even want to
listen. Rural and coop bankers from Luzon who were in Aklan recently
saw its two-story buildings across the province all locked
up—devoid of any sign of life.
A P200-million bailout, not even a tiny wee bit
of what was granted to UCPB, would have saved the rural bank from
closure. But who were the small Aklanon coop bank investors compared
to the big shots that hold stocks in the UCBP? These were small
entrepreneurs and small farmers, for God’s sake. They have never
partied with Maurice Arcache’s crowd. They deserve to be
slaughtered.
The case of the two banks tells everything about
the mindset of the powerful people in this country. If you are small
and you have problems, you have nowhere to turn to. If you are big
and well-connected, you can screw yourself time and time again and
your cozy circle of powerful friends will always bail you out.
Acts of mercy are supposed to be class-blind.
Not so in this country. If you have to screw up, you have to screw
up big time. Or else, you will be fed to the vultures.
The Coop Bank of Nueva Ecija, the first coop
bank in the country, has laid out the clear details of its
rehabilitation plan. At no cost to the government, bank managers
said, save perhaps for the patience and understanding on the part of
the government overseers while the pioneering coop bank in a
dominantly agriculture province heals itself back to full financial
health.
You know what? The government people sitting in
the committees tasked to oversee the rehabilitation have been
stalling for months. As if the rehabilitation of the bank would lead
to national bankruptcy.
The across-the-board pro-big and anti-small bias
has to be directly blamed for the failure of people in the rural
areas to get the lift and push they need to cross over the poverty
line.
Small farmers and small-scale agricultural
producers have been shut out of the credit mainstream. While the
Agri-Agra Law directs banks to lend 25 percent of their yearly loan
portfolio to small farmers and agrarian reform beneficiaries, the
actual percentage of lending to the small tillers and small-scale
entrepreneurs is not even 2 percent of that mandated 25 percent.
At present, the 25 percent of the commercial
banks total loan portfolio is roughly P400 billion a year. Pumped
into countryside relending, this could be the equivalent of funding
a mini-Marshall Plan for small-scale agricultural production,
covering all agricultural sub-sectors, from rice to livestock.
But the banks would rather buy government bonds
or invest in mass housing—which are listed under the law as
alternative compliance to agricultural relen-ding—rather than lend
out money to farmers.
Or, the banks would rather lend money to the
giant agri-business companies, those so big that they have massive
investment overseas. Then, pass off these loans to the business
giants as agricultural lending.
The bankers’ mindset is this: why would we
lend money to these hampaslupa and balasubas?
Without the production loans and the startup
capital obtained at competitive rates, the fate of the small farmers
cropping season after every cropping season is already
pre-determined—failure.
This anti-small bias has been the
countryside’s sad story, our story rather, for a hundred years.
My farmer-father, during his entire lifetime,
set foot inside a bank only once. He applied for a production loan.
After hours of waiting, he was given a stack of documents by a rude
clerk. He can’t understand a word. He left.
From then on he swore that only the usurero was
his true friend.
mvrong@yahoo.com
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