The Agri-Microfinance Program (AMP) for Small Farmers and Fisherfolk and their Households is a joint program of the Agricultural Credit Policy Council (ACPC) and the People’s Credit and Finance Corporation (PCFC) for the provision of credit to qualified borrower organizations for re-lending to small farmers and fisherfolk households and groups/organizations.

finance photo

Photo by ChodHound Agri-Microfinance Program (AMP) for Small Farmers and  Fisherfolk and their Households 1

The AMP was established by virtue of ACPC Resolution No. 2, Series of 2009 as one of the programs under the Agro-industry Modernization Credit and Financing Program (AMCFP) – the government’s umbrella credit program for agriculture and fisheries.

Program Objective: The program aims to reduce poverty and improve the quality of life of marginalized farmers and fisherfolk by financing agricultural projects and activities that will increase their productivity and incomes.

Program Scheme:
Under the AMP, PCFC administers the provision of credit to eligible borrowing organizations. For PCFC-accredited banks and MFIs (Type 1 organizations/ institutions), PCFC processes, evaluates and approves the loan application. For non-bank MFIs that pass the accreditation criteria of PCFC for Type 2 organizations/ institutions, the ACPC-PCFC
Program Management Committee reviews the loan application for endorsement to PCFC’s approving authority.

Loans charged against the AMP Fund are subject to review, approval and validation by ACPC.

The borrower-organizations either extend (i) agri-fishery microfinance loans to eligible borrowers; and/or (ii) loans for value-adding and marketing activities of eligible small farmers and fisherfolk groups/organizations.

Program Features:

A. Eligible Borrower Organizations/Institutions – Microfinance institutions (MFIs) such as cooperative/rural banks, cooperatives, non-government organizations (NGOs) and other people’s organizations that pass credit evaluation of PCFC.

Types Of Financing Facilities:
* Agri-Fishery Microfinancing – Credit funds for re-lending to eligible sub-borrowers to finance their income generating agri and agri-related activities.
* Value Chain Financing – Credit funds intended to finance value chain activities and acquisition of assets for post production/agri-enterprise or agri-business projects of eligible sub-borrowers.

Financing Terms:

Credit Limits
* Depends on the MFI’s absorptive capacity, work plan, and target areas to be covered, number of outreach, estimated
credit needs and target portfolio.
* Up to a maximum of P10 million per MFI.

Interest Rate – 10% – 12% per annum for all types of organizations / institutions.
Loan Maturity – Maximum of 4 years.

Mode of Payment – Principal and interest : Quarterly

Security – Assignment of sub-borrowers’ Promissory Notes and other underlying collaterals/guarantee cover.

B. SUB-BORROWERS

Eligible Sub-Borrowers:
 * Agri-Fishery Microfinancing – Household heads, spouses or adult working members of small farming/ fishing households. Only one member per household is qualified to borrow at a single time under the project.

* Value Chain Financing Facility – Microfinance groups/organizations with or without juridical personality that meet the following criteria:
o Composed of at least five (5) members;
o Engaged in any post production/agri-enterprise / agribusiness/project;
o With firm market and established supply of raw materials.

Loan Facilities:

* Agri-Fishery Microfinancing – Loans shall be used to support any or a combination of farm, off-farm/non-farm income generating activities.
 * Value Chain Financing Facility -Loans shall be used for any of the following purposes:
o Working capital; and
o Acquisition of assets for agri/fishery product marketing or inputs trading.

Financing Terms:

Credit Limits

 * Agri-Fishery Microfinancing: Up to a maximum of P50,000 per sub-borrower.

* Value-Chain Microfinancing: Up to a maximum of P1 million per sub-borrower group/organization but not to exceed
P150,000 per member, whichever is higher.

Interest Rate – The applicable interest rate shall be based on the prevailing interest rates of the conduit organizations/institutions.

Loan Maturity and Mode of Payment:
 * Agri-Fishery Microfinancing: Maximum of one (1) year. The amortization schedule shall be based on the household’s cash flow. At least 20% of the loan should be amortized either weekly or monthly and the remaining balance to be paid upon loan maturity.
 * Value Chain Financing: The loan shall be payable based on the cash flow of the business but not to exceed three (3) years.

Security – Any or a combination of the following:
 * Deed of assignment of acquired assets (i.e. equipment, vehicles, etc.)
 * Joint and Several Signatures;
 * Issuance of post-dated checks;
 * Marketing Agreement (If applicable); and/or
 * Any other acceptable form of collateral/security.

Source: Financing Program for Micro, Small, and Medium Emterprisees 2010 Ed.- BMSMED