Microfinance "Sikat Saka" Program of the Landbank of the Philippines

Abstract

INTRODUCTION

Numerous microfinance programs by the Philippine government have been provided to Small Farmers to help augment rice production, income, and for them to become an agri-entrepreneur. Studies have been conducted on the effectiveness of these microfinance programs and still, BSP data showed low compliance with the mandatory Agri-Agra credit under R.A. No. 10000. Hence, the study was conducted to get the concerns of the Small Farmers regarding the microfinance program of the government particularly the "Sikat Saka" Program (SSP), a direct lending facility, and a joint project of Department of Agriculture (DA) andLandbank of the Philippines (LBP).

METHODS

Descriptive design, interview, focus group discussion, and secondary data analysis are the research designs and methods used in the conduct of the study. 1,333 Small farmers from the SSP covered provinces of the Northern and Central Luzon responded to the survey questionnaire prepared by the researcher.

RESULTS

The majority of the respondents recognized that branch or office location, loan documentary requirements, technical assistance, and loan approval were a challenge. The LBP branch or office location is two to three rides away, it will take several hours to reach the LBP office or branch, and the transportation fare costly. The respondents were having difficulty in the preparation of documents and filling-up the loan application since minimum technical assistance was provided. The biggest hindrance to the respondents was the 30-day loan approval which entails going back and forth to the LBP branch or office for follow-ups, and loan release sometimes mismatch the needs of the rice production crop cycle.

DISCUSSIONS

The results manifest the need to ease doing business in the countryside specifically for the Small Farmers. To maintain the viability and sustainability of SSP, enhancement of the Landbank Easy Access Facility (LEAF) as Banking on One Stop Shop (BOSS) is highly recommended to meet clients' needs where transaction initiation to consummation happens.