\WHAT IS ALERT ARBOs Program?​

The Accessible Loans for Empowered, Resilient, and Transformed Agrarian Reform Beneficiary Organizations or ALERT ARBOs Program aims to provide adequate, timely, and affordable loans accessible to eligible ARBOs and their members. Along with the Agricultural Credit Policy Council (DA-ACPC), the program is jointly implemented by the Department of Agriculture (DA), the Department of Environment and Natural Resources (DENR), the Department of Agrarian Reform (DAR), and the Landbank of the Philippines (LANDBANK).

Credit support services such as agricultural insurance, technical assistance, capacity building, and marketing assistance are also offered to ARBOs to empower and strengthen their capabilities and resiliency.

The program began in October 2012 as the Agrarian Production Credit Program or APCP. It was a flexible credit facility for Agrarian Reform Beneficiary Organizations (ARBOs) that are yet to qualify under the regular lending window of LANDBANK. In 2020, the National Program Management Committee (NPMC), which consists of the implementing agencies, adopted to transform the APCP into the ALERT ARBOs Program, strengthening its implementing rules and regulations to better cater to Agrarian Reform Beneficiaries (ARBs) nationwide.

WHO ARE ELIGIBLE​

  • Agrarian Reform Beneficiary Organizations (ARBOs)
  • Farmer Organizations/People’s Organizations other than ARBOs with ARB or ARB household members
  • Other conduits such as Cooperatives, NGOs, and rural banks only, with ARB or ARB household members or APCP ineligible ARBOs as clients
  • ARBs
  • ARB Household Members
  1. With legal personality as supported by its registration with the Cooperative Development Authority or the Securities and Exchange Commission (SEC), as applicable.
  2. With ARBs or ARB household members comprising a majority of the membership (50+1).
  3. No adverse findings on the borrower and its principals (Board of Directors and Key Officers, such as the President, Secretary, Treasurer, and Manager).
  4. Operational for at least one (1) year as evidenced by audited financial statements and minutes of meetings from at least four regular (4) meetings for the past 12 months.
  5. Must have at least one (1) year track record of profitable operation before the 15 March 2020 COVID-19 lockdown/community quarantine based on financial statements/records.
  6. Presence of core management team (at least composed of manager, cashier/treasurer, and bookkeeper).
  7. With a net past-due ratio of not more than 25%.
  8. With systems and procedures in place, particularly in lending operations.
  9. With NO OUTSTANDING LOAN from LANDBANK or other formal lending institutions for the same project being applied for.   
  10. Additional for ARBOs venturing into new projects .Where familiarity in the proposed project can be established (i.e., the proponent/key officers have been involved or are working in a similar business and/or have undergone relevant training on the proposed business undertaking/s).

 

  • Loan Purpose for ARBOs
  • To supplement or augment the working capital requirements of ARBOs for on-lending to ARB members and ARB household members and/or to finance ARBO-managed projects*.
  • Sub-loan Purposes for ARBs and ARB Household Members 
  1. Production, post-production, and marketing activities of agriculture and fisheries commodities such as rice, corn, high-value commercial crops, livestock, poultry, fishery projects, and other agricultural commodities.
  2. Agri-fishery-based enterprise projects such as, but not limited to, trading and marketing, and processing of crops and commodities in support of food and non-food commodity value chain.
  3. Acquisition of small farm implements, equipment, and machinery such as hand tractors, transplanters, and irrigation pumps.

Note: For ARBO-managed projects, eligible loan purpose/projects shall also include items 1 and 2 above, and the acquisition of fixed assets, facilities, and farm machinery and equipment.

  1. Short Term Loan Line (STLL)
  2. Term Loan (TL)
  3. Short Term Loan (STL)

Note: STL and TL are intended for the possible adoption of a Digital Lending System for the program

LOANABLE AMOUNT
  1. For existing borrowers – based on actual credit requirements of members-borrowers but not to exceed 90% of the total project/production cost
  2. For new borrowers – Based on actual credit requirements of member-borrowers but not to exceed 90% of the total project/production cost, provided the total amount of loan/line shall not exceed P15 million, or at such amount as may be approved by the NPMC
  • Up to 90% of the total project/production cost but not to exceed P15 million for new borrowers, or at such amount as may be approved by the NPMC. The remaining 10% shall serve as the borrower’s equity in the form of labor, cash, and/or capital outlay, etc.

Interest Rate

Fixed at 5% p.a. for both STLL and TL or such interest rate as may be subsequently approved by the NPMC

Pass-On Rate to End-Borrowers

Maximum of 10% p.a., inclusive of other charges, or at such pass-on rate as may be subsequently approved by the NPMC

Penalty on Late Payment

3 % p.a based on unpaid principal and interest to be charged after a 60-day grace period, Or at such penalty rate as may be approved by the NPMC

LOAN REPAYMENT TERM
  1. STL and STLL – up to a maximum of 360 days promissory note
  2. TL – up to 10 years, payable upon the maturity of PNs per batch to be amortized monthly, quarterly, semi-annually, or annually
  • STLL and STL – up to 360 days promissory note, based on crop cycle or project cash flow
  • TL – up to 10 years based on crop cycle or project cash flow, payable monthly, quarterly, semi-annually, or annually
  • TL for fixed asset acquisition – up to 10 years, based on project cash flow or economic useful life of the fixed assets, payable monthly, quarterly, semi-annually, or annually.

Collaterals

  • Real Estate Mortgage (if applicable)
  • Security Interest on the object of financing (if applicable)