Presentation to rbap as of 5.26.12

Presented By:Ms. LETICIA P. VILLA

First Vice PresidentLand Bank of the Philippines

LBP Programs LBP Programs and Services to and Services to

Countryside Financial Countryside Financial Institutions Institutions

Outline of PresentationOutline of Presentation

1.1. LBP Credit Assistance to Countryside LBP Credit Assistance to Countryside Financial Institutions (CFIs)Financial Institutions (CFIs)

2.2. Grassroots Development ProgramGrassroots Development Program Credit ComponentCredit Component Technical Assistance ComponentTechnical Assistance Component

3.3. CFIEP’s Capability Building Support to the Rural CFIEP’s Capability Building Support to the Rural Bankers Association of the PhilippinesBankers Association of the Philippines

4.4. Available LBP Programs and Services for CFIsAvailable LBP Programs and Services for CFIs CreditCredit Equity InvestmentEquity Investment Other ServicesOther Services

LBP Credit LBP Credit Assistance Assistance

to CFIsto CFIs

Industry Data of Rural Banks As of 31 December 2011

Source: BSP website

49.9%

Number of LBP-Assisted CFIs (323)

Rural Banks

Coop BanksThrift Bank

As of 31 December 2011

As of 31 December 2011

Rural Banks

Coop Banks

Thrift Banks

Volume of Loans (P17,118 M)

Grassroots Development

Program (GDP)

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.

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

Credit Component of

the GDP

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

Program Features & Basic Policies

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%

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;

Eligibility Criteria for CFIs

Agri-Business Entities (ABEs)

Non-Government Organizations, which may include church-based organizations

Eligible Grassroots Enabling Partners(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

Eligibility Criteria for GEPs

For 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

Eligibility Criteria for GEPs

Credit 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.

Lending Policies

Manner of Loan ReleaseLump sum, based on the masterlist of prospective sub-borrowers submitted by the GEPs to CFIs

Term of the LoanMaximum 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.

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

Lending Policies

Techical Assistance

Component of the GDP

Purpose of the TA Fund

Institutional support for credit conduits and grassroots enabling partners;

Business development and organizational strengthening assistance to sub-borrowers.

Operating Policies

1. The grant shall be provided for a maximum of two (2) years, reckoned from date of loan release from LANDBANK;

2. The amount of the TA shall not be more than 10% of the total loan release or P2.0 Million per conduit;

3. The grant shall be on a reimbursement basis which shall be provided at the end of one year of engagement;

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;

Coverage..cont’d

Business and Organizational Development Training on enterprise/livelihood activities for the

sub-borrowers;

development training for the formation of SFF cooperatives

CFIEP’s

Capability Building Support to RBAP

The CFIEP Technical Committee (TC) The CFIEP Technical Committee (TC) has approved on 09 May 2012 during has approved on 09 May 2012 during its meeting the its meeting the 70%70% (CFIEP) – (CFIEP) – 30%30% (RB) sharing on the training cost in (RB) sharing on the training cost in the conduct of Corporate the conduct of Corporate Governmance seminar.Governmance seminar.

CFIEP alloted a budget of P600,000 for CFIEP alloted a budget of P600,000 for the conduct of at least eight (8) the conduct of at least eight (8) batches of trainings with 40-50 batches of trainings with 40-50 participants per batch until December participants per batch until December 20122012..

Available LBP Programs for CFIs

1. 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

Credit Programs

1. Capital Infusion for CFIs (2nd Tranche)

• Developmental Module

• Business Module

• Risk Recovery Program-Types 1 & 2

2. Unsecured Subordinated Debt Facility

Capital Enhancement Programs

Other Current Programs/Services

1. Clearing Arrangement with CFIs with Negotiable Order of Withdrawal Accounts

2. Correspondent Banking Line (under DSWD’s Conditional Cash Transfer Program)

3. Agricultural Guarantee Fund Pool

End of Presentation

THANK YOU…