Question & AnswerQ&A (QRCGC CIRCULAR NO. 099, SERIES OF 1999)
The main objective of the AGRIKULTURANG MakaMASA Sugar Farm Modernization program is to revitalize the Sugar Industry through mechanized farming, promote the bankability and access of sugar farmers/planters with formal credit institutions, facilitate the flow of credit to the Sugar Industry, and promote the acceptance of sugar farms as collateral for credit capital.
The program is based on RA 7393 (establishing credit support and guarantee system for farmers and fisherfolk), RA 8435 (mandating Quedancor as credit guarantee institution for the agri-fishery sector), and the Memorandum of Agreement dated April 14, 1999, among the Department of Agriculture, Quedancor, and the Sugar Regulatory Administration.
A sugar farmer/planter is any natural person whose primary livelihood is cultivation of land for sugarcane production, either by themselves or with help from their immediate farm household or workers, regardless of whether the land is owned or leased.
Borrowers must be endorsed by the Sugar Regulatory Administration (SRA), duly accredited with Quedancor, and able to provide a 20% down payment for the tractor or implements they intend to purchase.
The program utilizes the Sole Guarantee Mode (SGM), where Quedancor provides a guarantee cover on loans fully funded by Lending Banks.
Cooperatives must submit a Certificate of Registration or Confirmation from the CDA, copies of Articles of Cooperation and By-Laws, the Board Resolution and Secretary's Certificate authorizing participation and designating representatives, and a list of key officials and members.
The interest rate is at the discretion of the Lending Bank and is usually lower than prevailing commercial rates.
Cancellation or nullification can occur due to collusion between parties to defraud Quedancor, loans made to unqualified borrowers, false statements by Lending Banks, loans not properly recommended or documented, and holding out of loan portions by Lending Banks.
Lending Banks may choose to foreclose the collateral or file a case against the borrower/co-makers and must inform Quedancor in writing within fifteen (15) days of taking such action.
Lending Banks must submit a Request for Guarantee Coverage within thirty (30) days from loan release, pay the guarantee fee, and submit supporting documentation to Quedancor's Head Office or District Office Cashier. Quedancor will then issue the Guarantee Coverage valid until the loan's maturity date.