An unlimited financing program for coffee production was recently put up by the Land Bank of the Philippines (LBP) in order to give support to the lagging coffee industry in the country.
LBP officer Diosdado M. Domingo described the new facility as a seven-year loan with a two year grace period open to individual farmers/producers, cooperatives, and non-government organization.
According to Domingo, Land Bank has shifted from financing generic commodities to a more targeted approach, with coffee and cacao as priority commodities. The erstwhile loan ceiling of Php 100 thousand per hectare was also lifted to make the credit amount unlimited.
Individual borrowers are required to put up collaterals like land and building to avail of the credit facility, but cooperatives are exempt from the requirement.
The program is a response to the need to stimulate coffee production. This year is expected to be a lean time for coffee farmers, where coffee harvest is expected to fall below the country’s requirements.
Land Bank is a government bank dedicated to the financing needs of farmers and fisher folk, small and medium enterprises and microenterprises. It also extends loans to agribusiness, agri-infrastructure and other agri- and environment-related projects, socialized housing, schools and hospitals.
Land Bank is the largest formal credit institution in the rural areas. Its credit delivery system is able to penetrate a substantial percentage of the country’s total number of municipalities.
In a related move, the Peace and Equity Foundation (PEF) also announced it is making available technical assistance to coffee farmers, even as its equity arm Peace and Equity Holdings provides funding to those with at least a three-year track record in coffee farming.
PEF Executive Director Roberto Calingo said the Foundation generated endowment funds which are now used to bolsters local coffee planting. It expects to help 100 thousand coffee producers in the next five years.
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