“FORGET 5-6 and turn to government banks to borrow money.” This was the advice of lawmaker Cynthia Villar during her recent visit to Cebu this week.
The senator urged the farmers and fisherfolk of Tuburan to take advantage of the government’s lending programs instead of turning to “5-6” moneylenders.
“At a 20 percent interest rate or so, there will be no business that will grow sustainably,” said Villar.
The senator emphasized that there is enough money in government financial institutions like the Landbank of the Philippines (LBP) for farmers and fisherfolk to borrow money from at a lesser interest rate.
Villar said farmers and fisherfolk can now avail themselves of loans with two percent interest per annum through the Agricultural Competitiveness Enhancement Fund (Acef).
Individual borrowers can borrow up to P1 million while P5 million can be granted to for associations and cooperatives.
But despite this friendly credit rate, Villar said there are fewer borrowers in banks.
“It could be because our farmers don’t want to go to banks, not enough collateral or no knowledge on how to go about the lending process,” she said.
The senator announced she will be going to Indonesia next month to study how their lending system works.
“Banks there have loan agents who visit farmers and fisherfolk so they could avail themselves of loans. It’s like banks going to rural areas,” she said.
Villar said the country could learn from Indonesia’s model and best practices so they could plug in more farmers, fisherfolk, and micro and small enterprises into the formal lending economy.
LBP reported it released loans amounting to P62.5 billion in 2017 which benefited 837,653 farmers and fishers from across the country. (KOC)