Author Topic: Funds for SMEs from Land Bank !!!!  (Read 1705 times)

Capitan Berong

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Funds for SMEs from Land Bank !!!!
« on: May 22, 2007, 08:20:21 PM »

Mga 'Sano/'Sana,

Thought you might be interested to know that Small & Medium Enterprises in Bohol and the rest of the country have now access to funding .....

Please read on .....
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Land Bank launches P1-B fund for farm-based SMEs

Another P1B set for equity in microfinance firms
By Doris Dumlao
Inquirer
Last updated 05:05am (Mla time) 05/19/2007

MANILA, Philippines -- State-owned Land Bank of the Philippines has unveiled two new funding facilities totaling P2 billion for microfinance banks and agriculture-based small and medium-scale enterprises (SMEs).

Its president, Gilda Pico, said Land Bank recently got central bank approval to allot P1 billion in equity infusion for countryside financial institutions engaged in microfinance -- the provision of small, uncollateralized loans to the poor to help them start their own businesses.

The second initiative, the P1-billion Development Advocacy Program, offers alternative and more flexible credit schemes to better suit the characteristics, requirements and paying capabilities of small farmers and fisherfolk as well as SME borrowers.

The equity investment program is open to startup cooperatives, rural and thrift banks established by microfinance nongovernmental organizations or cooperatives as well as those that have been in existence for more than a year and are affiliated with NGOs or cooperatives.

To be eligible for the program, which provides capital instead of loans, these banks must have a microfinance portfolio of at least P20 million or active microfinance borrowers numbering at least 3,000 at the time of application.

“Through this equity investment program we have set up, Land Bank is helping establish new and viable conduits that will cater to the microfinance sector,” Pico said.

With this program, she said Land Bank hoped to encourage microfinance NGOs or cooperatives to convert themselves into thrift, rural or cooperative banks so they could increase credit delivery and expand their reach to include the marginalized sectors, specifically small farmers and fisherfolk.

But as a condition for the equity infusion, the countryside banks must triple their relending to serve farming and other livelihood requirements of individual farmers or fisherfolk households within three years from the date of release of the equity infusion.

These banks must also be able to maintain or build a loan portfolio, majority of which belongs to family of small farmers/fisherfolk or their household members.

The Development Advocacy Program (DAP) is a nontraditional lending program that veers away from the rigid requirements of collateral-based lending. Instead, it adopts an enterprise-based approach in extending credit and other assistance to small farmers and fisherfolk.

“Through this innovative program, Land Bank is providing our priority sectors with more avenues and windows to encourage them to engage in productive activities to help augment their income,” Pico said. “In essence, we are also given the opportunity to assist more poor households.”

The DAP will provide funds for working capital or fixed asset acquisition requirements of cooperatives, federations, associations, NGOs as well as SMEs. The lending facility may be gradually increased based on repayment record and project success.

The program intends to support viable projects with established markets that make use of nontraditional lending modes such as receivables financing, purchase order financing and household cashflow-based financing as well as those that make use of credit enhancement instruments like market contracts or guarantee covers.

Land Bank has reported a first-quarter net income of P1.05 billion, up 16 percent from P908 million in the same period last year.

Pico attributed the growth to an increase in fee-based income, reduction in operating expenses by P93 million as well as lower interest expense on deposits.

For the full year, Pico said the bank set an internal target of P4.0 billion in profit. She said this year’s earnings were expected to be supported by increases in loans and investments.

In the first quarter, the bank’s revenues inched up one percent to P6.15 billion from a year earlier. Prevailing low interest rates reduced interest expense on deposits and borrowings by 16 percent and 20 percent, respectively.

Deposits reached P280.8 billion, up 19 percent from the first quarter of last year.

Capital rose 25 percent to P34 billion from P27 billion.

Total assets as of end-March were up 20 percent at P371 billion.
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Re: Funds for SMEs from Land Bank !!!!
« Reply #1 on: May 23, 2007, 12:01:56 AM »
There should be more funds from the government for this purpose.

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