Dar apcp

Agrarian Production Credit Program

Joint DA-DAR-LBP MC No. 01, S. 2012

What is the APCP?•Credit assistance for crop production • to newly-organized and existing ARBOs • FOs (other than ARBOs)• Other conduits

• Only 57% of farmers have access to credit from financing institutions.

• One in three ARBs in ARCs is in need of credit.

• New ARB organizations may still not qualify under CAP-PBD and LBP regular lending program.

• Some ARB organizations still require organizational strengthening to make them credit worthy.

• DA, DAR and LBP will pool resources and expertise to help ARBs access affordable credit, development assistance and marketing support.

Why design APCP?

APCP Objectives

Provide credit assistance to ARBs/ ARB household through organizations/other conduits to support individual or communal crop production.

•Ensure sustainable production of crops and increase the income of ARBs/ household members by providing them other support services.

•  Strengthen ARBOs and improve the capabilities of ARBs through the provision of institutional capability building.

Components of the APCP1. PROVISION OF AGRICULTURAL PRODUCTION

CREDIT• Loans for ARBs who have acquired landholdings through

CARP/CARPER• Loans will be coursed through ARBOs, FOs and other

conduits• Loans will finance the crop production. 2. PROVISION OF AGRICULTURAL PRODUCTION MANAGEMENT AND FINANCIAL MANAGEMENT SUPPORT

• TA to eligible ARBOs/conduits from DA and other institutions, and technical experts to extend assistance in setting-up the loan disbursement and repayment system.  3. INSTITUTIONAL CAPACITY BUILDING OF ELIGIBLE CONDUITS

• Organizational vision, operational PSPs and good governance will be put in place.

• Enterprise development, to ensure viability and profitability of agricultural production, business services and projects of conduits.

General policies of the APCP•APCP will prepare the ARBOs to become

credit conduits.•APCP will cover new and existing ARBOs in

need of credit •High LAD provinces are priority areas.•Based on the production cycle of

agricultural crops.

ELIGIBLE BORROWERS• ARB Organizations (ARBOs)• Farmers Organizations other than ARBOs with

ARB or ARB household members• Other conduits (Cooperatives, NGOs and rural

banks only) with ARB or ARB household members or APCP ineligible ARBOs as clients.

MINIMUM ELIGIBILITY CRITERIAARBOs:

legal personality At least six (6) months in operation. Majority of members are ARBs or ARB

household members; PSPs on lending; Presence of management team.

ELIGIBLE SUB-BORROWERS

•  Under ARBOs and FOs other than ARBOs - ARBs or ARB household members.

•  Under other conduits - ARBs, ARB household members or APCP ineligible ARBOs as clients.

LOAN PURPOSE• Finance crop production • The loan purpose may be expanded to cover agri-

enterprise and livelihood projectsMAXIMUM LOAN AMOUNT• Total credit requirement of the ARBs or ARB

household members as determined by LBP. • The required debt-equity ratio for eligible

borrowers/conduits shall be waived.

TERM OF THE LOAN• Based on the production cycle of agricultural

crops to be produced but not to exceed two (2) years.

INTEREST RATE 8.5% P.A.

PASS-ON RATE TO END-BORROWERS

15% P.A.

PENALTY ON LATE PAYMENT

3% P.A.

INCENTIVE Rebate of 2% P.A. based on the principal amount

paid

What are the APCP’s general procedures? CAPACITY BUILDING AND OTHER SUPPORT

SERVICES

• DAR conducts capability development based on the requirements of the ARBO or FO.

▫ Direct intervention, through BARBD, DARPO and DARRO, in partnership with service providers, or outsourced.

•  The DARPO and DA-Regional Office facilitate the provision of common service facilities, improvement of access infrastructure, and value-chain enhancement.