Program Scope and Geographic Coverage
- Credit line opened to CoopBanks in identified GPEP priority provinces.
- Fund used for rice, rice seed, corn production, and grain marketing credit.
- Program duration: Crop Years 1993-1998 with gradual reduction of CALF funding from 70% to lower ratios.
- Institutionalization of capital formation and savings mobilization to sustain lending post-program.
- Coverage includes 24 priority provinces across various regions subject to change.
Eligibility Criteria for CoopBanks
- Must operate in GPEP target provinces.
- Accredited by Land Bank of the Philippines and/or Central Bank rediscounting programs.
- Must have no arrearages under CALF or submit acceptable payment plan if arrearages exist.
- Required liquidity ratio of 1:1; those with a ratio of 0.8:1 may participate with additional requirements.
- No serious internal management problems.
Use and Limits of the Credit Line
- Exclusively for rice seed production (for GPEP use), rice and corn production, and marketing.
- Maximum annual credit line per CoopBank: P10 million or 25% of deposit liabilities plus capital/net worth.
- Drawdown limit based on 1.5 times operating capital adjusted by "Y," the share of rice and corn loans in total portfolio.
- Fund sharing: Production loans start with 70% DA/ACPC and 30% CoopBank, moving progressively towards equal sharing; marketing loans at 50:50.
Interest Rates, Maturity, and Payments
- DA-ACPC credit line interest rates: MRR-6% for cooperatives, MRR-4% for individuals.
- Payment maturity is maximum of one year after drawdown release.
- CoopBanks to remit principal and interest payments to DA-ACPC for CALF.
Credit Risk and Security Requirements
- CoopBanks bear full credit risk; repayments independent of collection efficiency.
- DA/ACPC may collect directly if necessary.
- Security requirements vary by loan type: marketing contracts, crop insurance, warehouse receipts, or acceptable collateral.
- Joint and Several Signatures as fallback security.
- Deed of Subrogation if DA/ACPC collects directly from borrowers.
Capital Formation and Monitoring
- CoopBanks must increase capital/deposits annually by at least 20% of drawdown amounts.
- DA/ACPC access to CoopBank records related to the program is mandatory.
Renewal, Reduction, Suspension, and Termination of Credit Lines
- Annual review with requirements: eligibility, deposit/capital targets, satisfactory repayment.
- DA/ACPC may reduce, suspend, or terminate credit based on performance and compliance.
Penalties and Definitions of Delinquency and Default
- Delinquency declared upon failure to pay after 30-day grace; penalty fee of 2% monthly.
- Default declared for two missed drawdowns in six months, diversion of funds, insolvency, breach of contract, or material misrepresentation.
- In default, full payment demanded.
On-Lending Guidelines to End-Borrowers
- Eligible borrowers: small farmers/farmer cooperatives in GPEP masterlist committed to prescribed technology.
- Production loan ceiling: P8,000 per hectare; marketing loans limited to coop-borrower equity.
- Pass-on interest rates: MRR for cooperatives, MRR +3% for individuals.
- Loan maturity and payment terms set by CoopBanks but shall not exceed one year.
Procedures for Credit Line Approval and Drawdown
- Required documents: Articles of Incorporation, Board Resolution, financial reports.
- DA/ACPC approves credit line within reasonable time, formal agreements executed upon approval.
- Drawdown requires DA-certified list of loans, evaluation, execution of legal documents.
- Drawdowns up to P2 million approved by ACPC Executive Director; above by DA Secretary.
- Drawdown proceeds disbursed within 15 days to qualified borrowers with reporting requirements.
Program Monitoring and Reporting
- CoopBanks must submit quarterly reports detailing GPEP lending status to DA/ACPC.
- Guidelines effective immediately upon approval.
Definitions
- Small farmers: natural persons dependent on small-scale subsistence farming with gross sales not exceeding P180,000.
- Farmers organizations: cooperatives and entities primarily composed of small agricultural producers, registered with appropriate government agencies.