Dar-logo Ice-logo





SUBJECT    :     Amendment of the Joint DAR-LANDBANK Memorandum Circular (MC) No. 07, Series of 2006: Guidelines in the Implementation of the Credit                  Assistance Program for Program Beneficiaries Development (CAP-PBD) Window III

I.       Introduction/Rationale

The Joint DAR-LANDBANK Memorandum Circular (MC) No. 07, Series of 2006: Guidelines in the Implementation of CAP-PBD Window III, specifically Section VI, Item 3, stipulates that the "maximum loan amount shall not exceed Php1 million for the eligible borrowers in agrarian reform communities (ARCs) and Php500,000.00 for the non-ARC cooperatives/farmers associations."    AIHDcC

During the series of CAP-PBD Window III National Orientation and Planning Workshops held from August to September 2007, DAR and LANDBANK field implementers expressed apprehension that the said loan ceiling is inadequate to fund the agri-production requirements of the organizations' end borrowers, hence, the proponents may underfinance their proposed projects. This reservation was reinforced by the crop-specific matrix prepared by the National Technical Review Committee (NTRC), through the National Program Secretariat (NPS) using LANDBANK cost parameters, which showed a limited Program reach in terms of the number of hectares to be covered and number of ARBs to be benefited given the approved loan ceiling.

In view of the above, the National Program Management Committee (NPMC) issued Resolution No. 8, Series of 2007 on the Loanable Amount for ARC and Non-ARC Organizations and Corresponding Approving Authority, which adopts a capacity-based lending scheme under CAP-PBD Window III. The said scheme underscores the importance of determining the loan amount based on the actual project needs which may exceed the loan ceiling as provided for in MC 07, Series of 2006. The said resolution likewise provides that a higher loan ceiling may be granted to a certified organization provided that the following factors are present to ensure the success of the cooperative undertaking: (1) professional management; (2) assured market; and (3) effective collection strategies.    cAEaSC

It is in this light that this supplemental guidelines on the Program's loanable amount for ARC and non-ARC organizations and the corresponding approving authority is issued.

II.     Basic Lending Policies

A.     Loanable Amount

Since CAP-PBD is a transitory program with limited funding for the next 10 years, the loan ceiling per MC No. 07 shall be maintained which is P1 million in ARCs and P500,000.00 in non-ARCs.

However, flexibility shall be exercised in terms of determining the loanable amount based on the actual project needs of the certified organizations, provided that the proponents are able to justify the need for a higher loan amount and the above-cited factors shall be considered to ensure successful cooperative undertakings.    cHAaCE

B.     Approving Authority

Given the flexibility in determining loan amounts, the following approving authority shall apply:

                   Amount of Loan                                                      Approving Authority

     Loan proposals with maximum funding                  Provincial Program Management
      requirements of P1 million in ARCs and                 Committee (PPMC)

      P500,000.00 in non-ARCs

     Loan proposals exceeding P1 million in                 Regional Program Management
      ARCs and P500,000.00 in non-ARCs up             Committee (RPMC)

      to a maximum of P5 million

     Loan proposals exceeding P5 million                     National Program Management

                                                                                   Committee (NPMC)

C.     Interest Rates

The existing LANDBANK lending interest rates shall be charged to loans extended under the Program.    SCaITA

III.    Effectivity

This Memorandum Circular shall take effect immediately and shall remain in force until revoked in writing. The pertinent provisions of Joint DAR-LANDBANK MC No. 07, Series of 2006 which are inconsistent with this Memorandum Circular are hereby revoked, superseded, or modified accordingly.    TIDHCc


Department of Agrarian Reform


President and CEO
Land Bank of the Philippines



Department of Agrarian Reform
Elliptical Road, Diliman
Quezon City, Philippines
Tel. No.: (632) 928-7031 to 39

Copyright Information

All material contained in this site is copyrighted by the Department of Agrarian Reform unless otherwise specified. For the purposes of this demo, information are intended to show a representative example of a live site. All images and materials are the copyright of their respective owners.