agricultural guarantee fund pool (agfp)rbap.org/wp-content/uploads/2014/11/atienza.pdf · what is...
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AGRICULTURAL GUARANTEE FUND POOL (AGFP)
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Enabling Law:
! Administra,ve Order No. 225-‐A ! dated May 26, 2008 ! mandated GOCCs and GFIs to allocate 5% of their 2007 surplus for rice and food produc,on
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Contributors to the Fund
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TRANSCO
LBP
DBP
NG
PAGCOR
MWSS
TIDCORP
PEZA
PCSO
NAPOCOR
NEA
LWUA
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What is AGFP?
Agricultural Guarantee Fund Pool
! Is a Department of Agriculture - led program with LANDBANK as institutional manager
! Mitigates the risks involved in agricultural lending ! Encourages partner financial institutions and other lending
entities ! to lend unsecured agricultural food commodity production loans ! to small farmers and fisherfolk
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Lending and Borrowing Mismatch
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Filipino Farmers’ need for access
to credit
Lending Ins,tu,ons’ percep,on that lending to the
agricultural sector is very risky.
MISMATCH
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Realities in RURAL FINANCE
LACK OF ACCESS to Sustainable FINANCIAL SERVICES
Formal Lenders
• High Cost of Loan
• Non-bankable • High Credit Risk • High Cost of
Service Delivery
Informal Lenders
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Farmers
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! Confidence in agri-lending ! Expand loan portfolio ! Increase income ! Serve more clients ! Manage risk better ! Cash availability even
when clients fail to pay ! AGFP guaranteed loans are
20% risk weighted by the BSP (Circular No. 713), for Banks
Lending Institutions SFF
! Access to formal credit ! Unsecured ! Reasonable interest
rates ! Productivity
Benefits of AGFP Guarantee
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Who are eligible partners of AGFP?
Coops
AGFP Eligible Partners
SMEs/Large Corps
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Banks
NGO MFIs
Farmers Orgs
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Eligible Borrowers/ Eligible Loans
Small Farmers a. Crop Production
Tillers of not more than 7 hectares (ha) b. Poultry/Livestock Production
Poultry/Livestock Raiser of: § Up to 2,000 layers or 5,000 broilers § Up to 10 sow level or 50 fatteners § Up to 50 heads of goat/sheep § Up to 5 cattle breeders or 10 cattle fatteners § Up to 10 milking cows
Unsecured loans
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Eligible Borrowers/ Eligible Loans
Small Fisherfolk a. Fish Cage Operator
Loan amount up toP250,000 per operator b. Fishpond Operator
Up to 5 ha c. Coastal Fisherman
Up to 3 gross tons fishing boat Fishing activities w/in municipal waters (15-km radius from shore)
d. Engaged in Aquaculture Up to 5 ha
Unsecured loan
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Program Features
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! Guarantees up to 85% of the outstanding principal loan balance upon maturity
! Guarantees all risks except fraud on the part of the lending institution
! Guarantee Fee per annum - 2% for loans to regular borrower
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! Coverage within 60 days from date of loan release
! Payment of guarantee claims within 60 days from receipt of complete documents
Program Features
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Process Flow
Establishment of Guarantee Line
Guarantee Coverage
Request for Claims
Payment
Recovery of Subrogated Receivables
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Process Flow
Lending institutions shall
request for guarantee line
Guarantee Line is renewed annually
Establishment of Guarantee Line
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Establishment of Guarantee Line
REQUIREMENTS Request for Guarantee Line
Board Resolu,on, if applicable
Financial Statements: Interim and Annually for three years
CAMELS Ra,ng of at least 3
Capital Adequacy Ra,o of not less than 10
Report on Compliance to the Mandatory Agri-‐Agra Credit
Basic Business Informa,on (Business Profile)
Guarantee Agreement
AGFP Implemen,ng Rules
Specimen Signature (may be incorporated in the Board resolu,on)
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Process Flow
Guarantee Coverage
Lending Institutions shall request for guarantee
coverage: • in batches of PNs
• supported by list of borrowers.
• Effective upon payment of guarantee fee
• Valid until loan maturity but not to exceed the production cycle of the crop plus a 2-month extension period.
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Guarantee Coverage
REQUIREMENTS Request for Guarantee Coverage
Masterlist of Borrowers
Proof of Guarantee Fee Payment
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Process Flow
Request for Claims
Payment
Guarantee claims shall be filed within 60 days from Batch
Maturity Date* together with the supporting
documents * The last maturity date in the batch indicates the time for requesting guarantee claims
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Request for Claims
Payment
REQUIREMENTS Request for Guarantee Claims Payment Affidavit of Non-‐Payment Duly received demand/collec,on le]er to the sub-‐borrower Statement of Account of the sub-‐borrower as of maturity date Copy of Promissory Note & Discount /Disclosure Statement Proof of occurrence of calamity, pests and/or disease occurrence, if applicable Deed of Subroga,on with Collec,on Arrangement
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Process Flow
Recovery of Subrogated Receivables
85% of any collection made from individual subrogated account
remitted by the LI to the AGFP until the total
obligation of such sub-borrower with the AGFP has been fully settled.
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Recovery of Subrogated Receivables
REQUIREMENTS
Monthly Collec,on Reports
Remi]ance of Recoveries
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Program Updates (as of October 31, 2014)
! Guarantee fees:
! 2% for regular borrowers
! 1% for ARBs
! 50% discount on loans insured with PCIC
! 65 RBs participated in AGFP Workshops
! P369M in guarantee claims paid to 50 banks
! P130M of subrogated PNs recovered
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MS. EDNA A. ATIENZA
Program Director
(02) 522-0000 local 2204, 2479 or 2906
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AGRICULTURAL GUARANTEE FUND POOL (AGFP)
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