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Presentation to rbap as of 5.26.12

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Presentation to rbap as of 5.26.12

  1. 1. LBP Programs and Services toCountryside Financial Institutions Presented By: Ms. LETICIA P. VILLA First Vice President Land Bank of the Philippines
  2. 2. Outline of Presentation • LBP Credit Assistance to Countryside Financial Institutions (CFIs) • Grassroots Development Program  Credit Component  Technical Assistance Component  CFIEP’s Capability Building Support to the Rural Bankers Association of the Philippines  Available LBP Programs and Services for CFIs  Credit  Equity Investment  Other Services
  3. 3. LBP Credit Assistance to CFIs
  4. 4. Industry Data of Rural BanksAs of 31 December 2011 49.9% Source: BSP website
  5. 5. Number of LBP-Assisted CFIs (323)As of 31 December 2011 Rural Banks Thrift Bank Coop Banks
  6. 6. Volume of Loans (P17,118 M)As of 31 December 2011 Coop Banks Rural Banks Thrift Banks
  7. 7. GrassrootsDevelopment Program (GDP)
  8. 8. Program Objectives To encourage Countryside Financial Institutions (CFIs) and Microfinance Institutions (MFIs) to expand outreach and extend financial services in areas where there is very limited banking presence or unserved areas, and where small farmers and fisherfolk (SFFs) are not organized.
  9. 9. Program ComponentsA. Credit  To finance the term-loan working capital of participating CFIs/MFIs for relending to SFFs by participating CFIs/MFIs.B. Technical Assistance  To be given as incentive to the participating CFIs/MFIs in the form of trainings, enhancement of MIS database, among others
  10. 10. Credit Component of the GDP
  11. 11. LBP GRASSROOTS DEVELOPMENT PROGRAM (Funds Flow) LANDBANK CFIs & MFIs(Rural Banks, Thrift Banks, Coop Banks, NGOs) Grassroots Enabling Partners (Agribusiness entities, NGOs) Small Farmers & Fisherfolk
  12. 12. Program Features & Basic Policies
  13. 13. Eligibility Criteria for CFIs Accredited in the LANDBANK’s Rediscounting Program With CAMELS Rating of 3.0 or better in the last two recent examinations, with no rating below 3 in any of the CAMELS block during the said examination With Net Past Due Ratio of not more than 25%
  14. 14. Eligibility Criteria for CFIs With Capital adequacy ratio (CAR) of at least 12%; With Portfolio at Risk (PAR) of not more than 10% (for those with microfinance portfolio); In current status with satisfactory repayment in all facilities with creditor banks; No major BSP findings during the most recent examination;
  15. 15. Eligible Grassroots Enabling Partners(GEPs)  Agri-Business Entities (ABEs)  Non-Government Organizations, which may include church-based organizations
  16. 16. Eligibility Criteria for GEPs For Agri-Business Entities  With license/permit to operate business or a commercial activity with agri-based component in the unserved area;  Operating in the underved area in the last two (2) years;  With permanent office/address and has been holding office in the said address in the last three (3) years;  No adverse information on the principals
  17. 17. Eligibility Criteria for GEPsFor Non-Government Organizations With permanent office/address and has been holding office in the said address in the last three (3) years; With dedicated individual/staff to run and manage the relending program
  18. 18. Lending PoliciesCredit Facility Term Loan Purpose Working Capital for Relending Maximum Loan Amount Up to 10% of CFI’s networth based on its latest audited FS filed with BIR provided the amount is within the CFI’s borrowing capacity.
  19. 19. Lending Policies Manner of Loan Release Lump sum, based on the masterlist of prospective sub-borrowers submitted by the GEPs to CFIs Term of the Loan Maximum of three (3) years reckoned from the date of release Interest Rate Prevailing interest rate at the time of availment, fixed for the duration of the loan.
  20. 20. Lending Policies Collaterals/Securities • Assignment of CFI’s promissory notes plus underlying collaterals • Assignment of proceeds of AGFP guarantee for loans extended by GEPs to small farmers and fisherfolk, if applicable
  21. 21. Techical Assistance Component of the GDP
  22. 22. Purpose of the TA Fund Institutional support for credit conduits and grassroots enabling partners; Business development and organizational strengthening assistance to sub- borrowers.
  23. 23. Operating Policies 1. The grant shall be provided for a maximum of two (2) years, reckoned from date of loan release from LANDBANK; 3. The amount of the TA shall not be more than 10% of the total loan release or P2.0 Million per conduit; 5. The grant shall be on a reimbursement basis which shall be provided at the end of one year of engagement;
  24. 24. Coverage…cont’d Technical Assistance  Institutional Support  Salary subsidy of one staff equivalent to 50% of monthly salary and allowance but not more than P7,000.00 per month;  Acquisition of transport facilities (motorcycles) by the conduits;  Installation of MIS including credit policies, systems and procedure for grassroots enabling partners;  Staff development training for eligible conduits and grassroots enabling partners;
  25. 25. Coverage..cont’d  Business and Organizational Development  Training on enterprise/livelihood activities for the sub-borrowers;  development training for the formation of SFF cooperatives
  26. 26. CFIEP’sCapability Building Support to RBAP
  27. 27.  The CFIEP Technical Committee (TC) has approved on 09 May 2012 during its meeting the 70% (CFIEP) – 30% (RB) sharing on the training cost in the conduct of Corporate Governmance seminar. CFIEP alloted a budget of P600,000 for the conduct of at least eight (8) batches of trainings with 40-50 participants per batch until December 2012.
  28. 28. Available LBP Programs for CFIs
  29. 29. Credit Programs1. Rediscounting Line/Easy Rediscounting Facility (Short-Term)2. Term-Loan Rediscounting Facility3. Microfinance Program for MFI-Retailers4. Stand-by Clearing Line5. CFI Home Lending Program6. CFI Calamity Assistance Program
  30. 30. Credit Programs1. Rediscounting Line/Easy Rediscounting Facility (Short-Term)2. Term-Loan Rediscounting Facility3. Microfinance Program for MFI-Retailers4. Stand-by Clearing Line5. CFI Home Lending Program6. CFI-Calamity Enhancement Program
  31. 31. Credit Programs1. Rediscounting Line/Easy Rediscounting Facility (Short-Term)2. Term-Loan Rediscounting Facility3. Microfinance Program for MFI-Retailers4. Stand-by Clearing Line5. CFI Home Lending Program6. CFI Calamity Assistance Program
  32. 32. Capital Enhancement Programs• Capital Infusion for CFIs (2nd Tranche) • Developmental Module • Business Module • Risk Recovery Program-Types 1 & 22. Unsecured Subordinated Debt Facility
  33. 33. Capital Enhancement Programs• Unsecured Subordinated Debt Facility• Capital Infusion for CFIs (2nd Tranche) • Developmental Module • Business Module • Risk Recovery Program-Types 1 & 2
  34. 34. Other Current Programs/Services1. Clearing Arrangement with CFIs with Negotiable Order of Withdrawal Accounts2. Correspondent Banking Line (under DSWD’s Conditional Cash Transfer Program)3. Agricultural Guarantee Fund Pool
  35. 35. End of Presentation THANK YOU…

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