The Countryside Financial Institutions Enhancement Program (CFIEP), a joint program of Bangko Sentral ng Pilipinas, Philippine Deposit Insurance Corporation, and Land Bank of the Philippines, is rolling out a new lending program to assist countryside financial institutions (CFIs) that have been affected by natural and man-made calamities, pests and diseases, and viral infections or outbreaks, such as the coronavirus disease-2019 (Covid-19) pandemic.
The CFIEP-2020 Calamity Assistance Program (CFIEP-2020 CAP) lending program will provide additional working capital to cooperative banks, rural banks, and thrift banks.
The credit assistance may augment liquidity of CFIs that are affected by extensions or defaults of its borrowers as a result of calamities, disasters, and viral infections, and thereby encourage CFIs to continue lending, particularly to the agricultural sector.
“In the first three months of the year alone, our country has been hit by various calamities that have caused unfavorable outcomes to CFIs. We hope that the CFIEP-2020 CAP will help them recover from the damage and disruptions in their operations, and enable them to restore operational cash flows, thus allowing them to continue lending to small farmers,” Land Bank president and Chief Executive Officer Cecilia C. Borromeo said.
The program will be made available by Land Bank to eligible CFIs at an amount equivalent to 90 percent of their affected existing portfolio or P10 million per CFI, whichever is lower, provided that the loan amount does not exceed the CFI’s borrowing capacity, as per Land Bank’s policy.
The loan shall bear an interest rate of 4.5 percent per annum, fixed for one year and subject to annual re-pricing thereafter. The loan shall be payable up to a maximum of five years, with one year grace period on principal and interest payments.
The CFIs are also expected to relend the fund to their affected borrowers at concessional interest rates.
Interested borrowers may contact the nearest Land Bank lending center or branch nationwide or call Land Bank’s customer service hotline at (02) 8-405-7000 or at PLDT Domestic Toll Free 1-800-10-405-7000. – Press release
