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Noncollateral loans to farmers surged 87% to reach P2.9 billion |
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29 January 2004, Thursday - The Manila Times)
By Roderick T. dela Cruz NONCOLLATERAL loans extended to poor farmers and rural entrepreneurs reached P2.9 billion in 2003, according to the Quedan and Rural Credit Guarantee Corp. (Quedancor). |
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Nelson C. Buenaflor, president of Quedancor, which acts as the Department of Agriculture’s credit arm, said the loans last year represented an 87-percent surge from only P1.62 billion in 2002.
Quedancor, a semi-government lending firm, employs the Self Reliant Team (SRT) financing scheme, which was introduced by Buenaflor last year. The SRT model makes loan available to a team of five to 15 farmers, fishermen and small entrepreneurs through Quedancor’s 14 regional offices and 62 district offices nationwide. Quedancor’s loans are charged an average interest rate of 0.795 percent monthly or 9.54 percent annually. Of the total P2.9 billion lent in 2003, P2.47 billion were done through direct credit while the remaining P425 million was under the firm’s loan guarantee program, Buenaflor said. He said the total number of loan recipients increased by as much as 52 percent last year when Quendancor opened 18 more district and six extension offices around the country. Some 258,756 Filipino farmers and small entrepreneurs received noncollateral loans from Quedancor in 2003, up from only 169,759 beneficiaries in 2002. Among regions, Cagayan Valley received the largest loan from Quedancor amounting to P387.3 million. Metro Manila received P353.3 million; Ilocos, P258.9 million; Central Luzon, P256 million; Southern Mindanao, P243.8 million; and Bicol, P213 million. In Cagayan Valley, 26,701 beneficiaries received their loans in the form of farm production inputs to rehabilitate corn-growing areas damaged by last year’s Typhoon Harurot. In Metro Manila, loan recipients included urban poor food retailers, and women in need of capital to support their various livelihood projects, according to Buenaflor. Buenaflor said the lending firm opened new credit financing windows last year, including specialized lending programs for agricultural engineers and pineapple growers, micro-lending schemes for small coconut farmers, sugar growers and young farmers groups, and logistical competitiveness program for corn farmers. Quedancor, however, has yet to fund the P1.1 billion it committed to 98,835 farmer beneficiaries for the purchase of their farm production inputs last year. Buenaflor said the loans will be extended to the farmers as soon as Quedancor received the remaining P500 million from the Agricultural Competitiveness Enhancement Fund (acef) this year and when it collects money it lent to others farmers and fishers. Agriculture Secretary Luis P. Lorenzo Jr. said the success of Quedancor in lending to farmers and fishers only dispels lingering misconception in the financial markets that the poor are not credit-worthy. “If we were able to increase our lending activities, it’s because we believe our poor borrower-clients deserve to get loans to support their livelihood and also because we believe they can, and are willing, to pay back what they borrowed,” Lorenzo said. Commercial banks budge from lending to the agriculture sector because of the perceived high risks of nonrepayment by farmers. Farmers are also prohibited from securing bank loans with lands acquired through the land reform program as collateral. Buenaflor, however, estimated the percentage of loan repayments among farmers and rural entrepreneurs at an impressive 98 percent. Quedancor’s funds are sourced from the acef and secured from government and private financial institutions such as Land Bank of the Philippines, United Coconut Planters Bank, Veterans Bank, United Overseas Bank of Singapore, and Allied Bank. home | latest news |
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