In order to reach unbanked, underbanked, and underserved rural areas, the Department of Agriculture – Agricultural Credit Policy Council (DA-ACPC), the country’s principal agri-fishery finance institution, partners with farmer and fisher cooperatives, rural banks, cooperative banks, associations, and non-government organizations, accrediting them as lending conduits to disburse loan funds under the Production Loan Easy Access (PLEA) program.

The Malimono Multi-Purpose Cooperative (Malimono MPC) is one of these lending conduits, operating in Malimono, Surigao del Norte, where the PLEA program was launched back in June 2017.

“Noong bumisita si DA Secretary Emmanuel F. Piñol, nakita niya ang potential ng Malimono, lalong-lalo ng ating mga magsasaka at mangingisda,” recalls Mr. Dennis Ladres, Chairperson of Malimono MPC. He commends the DA and ACPC’s steadfast advocacy to provide farmers and fisherfolk with adequate technical and financial assistance, and is proud to call his cooperative an avenue through which the government can provide these services.

Founded in 1997, the cooperative has grown from having 19 principal members to 674 members today, with a majority being marginal and small farmers and fisherfolk (MSFF). As ACPC entrusted Malimono MPC with a P15M fund to implement the PLEA, 353 of its MSFF members were granted loans of up to P50,000 to finance their agri-fishery production.

Without the PLEA, Mr. Ladres observes that their farmer/fisherfolk members have limited options when it comes to credit. Formal financial institutions usually have too many application requirements that marginal farmers and fisherfolk have difficulty complying with, while informal lenders tend to charge steep interest rates.

The PLEA program, with its minimal requirements and low interest rate of 6% per annum, proves to be the solution. The PLEA gives members adequate time to pay off their loans, and allows them to re-avail of loans after every lending cycle.

Rice farmer Nelson Gallana from Brgy. Cantapoy and fisherman Fredie Trajano from Brgy. Karihatag both had negative experiences borrowing from traders and “5-6” lending schemes. They both expressed their relief at the affordable interest rate, reasonable application process, and convenient payment scheme of the PLEA.

“Dako ang diperensya sa PLEA kontra sa informal lenders (Malaki ang diperensya ng PLEA kontra sa informal lenders),” says Nelson, comparing the PLEA program with his experience with traders, who charged him as much as 3 sacks of palay for every P1,000 loan, a payment worth double the loan amount.

He used his P20,000 loan from PLEA to buy fertilizer, pesticide and other farming inputs. Since he no longer had to surrender his produce to the traders he borrowed from, while also increasing his production from 16 sacks to 30 sacks of palay from his half-hectare farm, he was finally able to earn more to support the needs of his family.

Meanwhile, Fredie used the P50,000 loan granted to him to finance his pump boat and buy other fishing equipment such as netting. He used to borrow from lenders who charged up to double the loan amount, making it difficult for him to pay with his unstable income.

Now, with the financial relief afforded to him through the PLEA, he carefully budgets his earnings to separate his loan payments from his family expenses, and even sets aside some savings. He says that with the assistance from the government, he is hopeful that he and his fellow fisherfolk will be able to improve their financial situations and uplift their lives.

Despite Malimono’s poverty incidence rate per family of 90 percent in 2017, Malimono MPC PLEA borrowers registered a record-high 195% repayment rate at one point due to advance payments. Mr. Ladres takes pride in the assurance that their farmer and fisher borrowers can be trusted to pay off their loans responsibly. Their collection officers’ efforts to encourage borrowers with regular reminders and visits have evidently paid off.

Aside from credit, Malimono MPC’s mission to empower members and allow them to sustain and manage their resources is also carried out through education, including financial literacy, bookkeeping, accounting, leadership and governance training.

DA-ACPC’s quest to provide affordable, accessible, and sustainable credit for small farmers and fisherfolk nationwide would not be possible without its partner lending conduits, like Malimono MPC, actively working at the community level.