Quedancor seeks approval of Php100-million credit facility

The Quedan and Rural Credit Guarantee Corporation (Quedancor), a government-owned financial institution, is currently negotiating with the Development Bank of the Philippines (DBP) on the approval of the Php100-million credit window for organic commodities, with initial focus on organic rice and muscovado sugar production. 

The Php100 million facility is estimated to provide assistance to 3,329 hectares planted to organic rice and 2,136 hectares for muscovado, which was based on the Industry assessment report done by the Philippine Development Assistance Programme (PDAP), a Philippine-based non-government organization focused on poverty reduction initiatives.  

Organic rice areas include provinces of Nueva Ecija, Camarines Sur, Negros Occidental, Bukidnon, Davao areas and Agusan del Sur. 

On the other hand, muscovado sugar production covers Abra, Pangasinan, Tarlac, Camarines Sur, Antique, Capiz, Iloilo, Negros Occidental, Bukidnon, Davao del Sur, Sultan Kudarat and North Cotabato.  

According to Quedancor, this credit window aims to increase the supply of organic rice and muscovado sugar in the local market. Moreover, this is seen to improve the income and profitability of small-scale producers and generate rural employment targeting poverty reduction.  

In a Business Forum entitled Strengthening of the Organic Industry held on 28 November at Old Swiss Inn, Makati City, key industry players in the organic movement lobbied for the reduction of the interest rate from 16 percent to 10-12 percent per year.  

PDAP Executive Director Jerry Pacturan mentioned that interest rate should be lowered down to encourage more farmers to shift to organic agriculture.   

“With the meager earnings from rice farming, 16 percent is too high. There won’t be anything left for farmers to support the daily expenses of households,” Pacturan added. 

PDAP also requested the increase on the loanable amount to Php24,000 from Php15,000 per hectare to integrate the labor cost entailed in the production since organic farming systems are more labor-intensive than input-intensive.  

Once approved, prospective clients can avail of this through Quedancor’s Self-Reliant Team (QP-SRT) and the Agri-Fishery Small and Medium Enterprises (QP-ASME).  

SRT program, for non-collateral loans, suggests farmers to group themselves into teams of 3-15 members, with a team leader in-charge of administrative concerns of the group.  

On the other hand, QP-ASME serves individuals and cooperatives with a maximum loanable amount of Php50,000, depending on the agreed collateral.  

Over a period of five years, Quedancor expects to generate Php413 million in releases and serve 25,356 borrowers.  

Stakeholders are expecting the approval of this proposal soon having adopted these recommendations in line with the passage of the Executive Order 481 on the Promotion and Development of the Organic Agriculture in the Philippines signed on 27 December 2005.