Sources of Funding
- Funds originated from USAID amounting to P4.719 million.
- The Government of the Philippines (GOP) provided a counterpart fund of P2.723 million.
- Total funding amounted to P7.442 million.
- The National Economic and Development Authority (NEDA) authorized BACOD to utilize the collections for reloaning purposes.
Objectives
- To develop and test a feasible support service technology package that benefits Samahang Nayon (now primary cooperatives) and their farmer-member beneficiaries.
- Specific objectives:
- Assess primary cooperatives’ capability to provide viable support services.
- Enable field-testing of new agricultural technologies for profitability and farmer acceptance.
- Identify effective farmer support systems to fulfill basic member needs.
- Establish a decentralized service network within cooperatives for program activities division.
General Loaning Policies and Operations
- The project tests the feasibility of primary cooperatives undertaking economic projects to benefit members.
- Funds are provided as loans to finance identified project needs under reasonable terms.
Types of Loans
- Marketing Loan: For purchase of members’ produce, farm inputs, and related marketing activities.
- Facility Loan: For acquiring light and locally produced farm equipment.
- Land/Building Loan: For buying land or materials to construct multipurpose buildings.
- Merchandising Loan: For purchasing consumer goods.
- Operating Loan: To finance administrative and operational expenses supporting economic activities.
Qualification of Borrowers
- Borrowers must be duly registered primary cooperatives actively engaged in economic activities.
- Cooperatives receiving financial assistance from other private or government sources are ineligible.
Specific Terms and Conditions
- Loan Amount:
- Limited to the actual project needs, not exceeding P100,000.
- Borrowers must contribute at least 15% as equity counterpart.
- Loan Security:
- Secured by existing cooperatives’ assets and those acquired through the loan.
- Interest Rates:
- Marketing/Operating and Land/Building Loans: Minimum 8% per annum.
- Facility Loans: Minimum 6% per annum.
- Terms and Repayment:
- Marketing/Merchandising Loans: Repayable within one year.
- Operating Loans: One to two years with equal quarterly amortizations.
- Facility Loans: Three to five years with semi-annual amortizations.
- Land/Building Loans: Five to ten years, one-year grace on principal repayment; interest computed from first year.
Documentary Requirements
- Application form including:
- Project feasibility study.
- Cooperative General Assembly resolution authorizing loan application and representatives.
- Certification by Area Extension Office Director of cooperative registration and good standing.
- Officer listing with addresses, signatures, term expiration, and Certificate of Incumbency.
- Latest financial and audited annual financial statements.
- Certified copies of Certificate of Registration, By-Laws, and Articles of Cooperation.
Loan Processing and Approval Procedures
- Cooperative files application with CDA Area Extension Office.
- Preliminary evaluation by Area Extension Office; if positive, endorsement to Cooperative Finance Group (CFG) for further evaluation.
- CFG conducts detailed evaluation including field credit investigation if necessary to affirm loan purpose, eligibility, project feasibility, and accounting systems.
- CFG through the Organizational and Education Department recommends approval or disapproval to the Board of Administrators based on evaluations.
Loan Release Mechanism
- Funds are transferred via telegraphic transfer from CDA depository bank to a local designated bank.
- Cooperative must submit a board resolution designating the bank and acceptance certification prior to fund release.
- Loan proceeds remain in a savings account with the designated bank.
- Disbursements are authorized by CFG when the project is ready to commence operations.
- For equipment purchases, delivery receipts signed by authorized officials along with certificate of acceptance must be submitted.
- Unutilized funds after 60 days trigger communication between CDS and CDA/IDD for project status or deferment; failure to justify may lead to loan recall.