Land Bank of the Philippines asked to lower I-Rescue rate
After meeting virtually with co-op sector leaders on April 23, the House Committee on Cooperative Development came up with a resolution to ask the LBP to lower the interest rate on its I-Rescue Lending Program from the current 5% to 2%. With Small and Medium Enterprises, co-ops and other microfinance institutions reeling from the blow wrought by the COVID-19 Crisis, the Land Bank of the Philippines (LBP) has offered the I-RESCUE Lending Program (I-Rescue).
The House Committee on Cooperative Development organized a virtual meeting on April 23 with committee members and co-op sector leaders on April 23.
Presenting the mechanics of I-Rescue at the virtual meeting was Mr. Edgar de Guzman, the Program Officer.
He said that in support of Republic Act 11469 or the “Bayanihan to Heal as One Act”, LBP, through the I-RESCUE Lending Program, now provides interim measures for SMEs and co-ops.
The program aims to provide additional funds and loan restructuring under more flexible terms and conditions to eligible borrowers until December 31.
Maximum amount of loan shall be up to 85% of the Coop/MFI. Maximum term is 5 years at 5 percent.
The five percent figure drew reaction from the participants. Committee Chair and COOP-NATCCO Representative Sabiniano Canama, said five percent may be too high.
Thus, the Committee agreed to request the LBP to lower the rate to 2 percent, matching the bank’s agricultural loan programs.
In a letter to LBP president, Cecilia C. Borromeo, Rep. Canama requested the LBP to consider “the possibility of lowering the interest rate other than the regular rate of five (5%) percent for the funds that may be made available for lending to cooperatives.”
This, according to Canama, was “in order to respond to the need for funds for the Recovery of the financial condition of the co-op sector.”
The Program is backed by an Initial Internal Fund of Php 10 Billion.
For co-ops, the Loan Purpose is for wholesale Lending Livelihood Financing to augment credit fund for on-lending to Small Farmer and Fishers (SFFs)/Micro, Small and Medium Enterprises.
The Loanable Amount is based on the Working Capital, based on the borrower’s funding requirements on its on-lending to its sub-borrowers’ working capital requirements.
Interested cooperatives shall submit a masterlist of its newly approved sub-loans for its sub-borrowers affected by disaster which LANDBANK shall fund as working capital of the Coop.
It was asked which co-ops are legible for the loan, since it is only Php 10 Billion at the moment. Cooperative Development Authority (CDA) Chairperson, Orlando Ravanera, replied that the CDA will coordinate with the LBP on the eligibility of co-ops.