Project Design of

Credit Assistance
Program for Program
Beneficiaries
Development
CAP-PBD Window III
Presented in the 100th PARC Executive
Committee Meeting
October 25, 2006
I. Rationale:
• The DAR’s mandate is to redistribute lands to
qualified ARBs and provide support services
to ensure development and productivity of the
awarded lands and incomes of ARBs

• As part of the support services component,

DAR facilitates the provision of credit and
financial services to cooperatives, farmers’
associations and ARBs through the
implementation of credit programs in
agrarian reform communities (ARCs);
• The CAP-PBD (1996- 2006)- is a transitory
program to assist non-bank eligible agrarian
cooperatives to become eligible borrowers to
the (LBP) regular window and other
financing institutions
♦ Window 1 for traditional crops
♦ Window II for rubber replanting
• The CAP-PBD deliverables:
1. 150 coops/FAs managing viable and
sustainable enterprise/ projects;
2. 100 coops/FAs able to access credit from

other lending windows

3. Income of ARBs increased to Php 60,000
4. 2,000 hectares replanted with rubber trees
ACCOMPLISHMENTS
• Window I -
♦ provided credit to 163 cooperatives,
♦ 71 viable and sustainable enterprises
♦ 214 projects funded (production loans for
rice, corn, sugarcane, and banana, trading
capital and fixed assets (pre & post harvest
facilities)
• Window II
♦ six (6) rubber replanting projects
♦ covering 1,945 hectares funded and
replanted
♦ 5 cooperatives in 5 ARCs
♦ benefiting 1,664 ARBs
• March 2004 -the PARC Executive Committee
approved the unification and merging of the
Countryside Partnership Scheme (5:25;70)
and CAP-PBD Window 1
• December 2004, - the 10th CAP-PBD National
Project Management Committee (NPMC)
Meeting approved the conduct of an external
evaluation of the program
• January 12, 2006, the evaluation result was
presented to the NPMC and approved the
extension of the program for another 10 years
due to unmet credit needs of a huge number of
ARBs.
• The strategies recommended for the re-
designing of CAP-PBD:

1. Shift program framework from ARB as

beneficiary to ARB as globally competitive
agri-entreprenuer maximizing the
rationalization thrust of the DAR;
2. Small loans and small risk products for
newly organized cooperatives, to allow the
intra-organizational institutions and
systems to mature without exposing the
officers to moral hazard problems and
financial risks that go along with large
loans;
3. Create a new window and provide a clean
slate for CAP-PBD extension to isolate new
accounts of the program extension from the
“mix-up” of accounts of Window I, where
there are inadequacies that must be
addressed;
2. Strengthen the Institutional Development,
Enterprise Development and Capacity
Development Components hand in hand with
provision of credit; and
3. Establish realistic program implementation
structure from central office to
municipal level and strengthen synergy
between DAR and LBP.
• In the extension of CAP-PBD for another
ten years, it shall continue to:
a) collect loan payments from 161
cooperatives, especially from the 90
cooperatives with past due accounts
covered by Window I;

c) provide technical assistance to Window I

cooperatives/FAs to ensure timely
payment of loans and eventually be eligible
to access credit from the regular window
of LBP and other financial institutions
as bank worthy creditors.
• CAP-PBD Window II shall continuously
provide technical assistance (institution
building and enterprise development) to
rubber-based plantation cooperatives and
shall pursue its operations using the existing
guidelines

• The CAP-PBD Window III shall be an

alternative credit window to non-bankable
cooperatives and farmers’ associations of
ARBs in agrarian reform areas, comprising of
ARCs and non-ARCs.
II. General Policies
1. CAP-PBD Window III is a three pronged
program covering ARCs and non-ARC
areas
♦ credit provision
♦ institutional development assistance
♦ Enterprise development assistance to
cooperatives, farmers’ association and
ARBs.
 General Policies ...
2. CAP-PBD Window III is a transitory credit
window and utilizes a graduated scheme in the
provision of credit
♦ small loans for newly organized and existing
ARB Coops/FAs
♦ Loan based on the absorptive capacity/
organizational maturity of the ARB coops/FA,
in accordance with the type of enterprise
♦ ID and ED interventions shall be provided in
accordance with the organizational maturity and
enterprise operations of the coops/association.
General Policies . . .
3. CAP-PBD Window III shall continue its
assistance to Window I, existing rubber
cooperatives and the 5:25:70 cooperatives.
♦ ID and ED technical guidance

♦ The interventions focus on strengthening

the organizational, managerial and
entrepreneurial capability of the cooperatives
to manage viable enterprises, generate better
income and be able to pay their loan
amortization on time.
• Program Objectives
The general objective of CAP-PBD
Window III is to make available credit
assistance to non-bank eligible
cooperatives and farmers association
and graduate to bank-eligible
organizations.
Program Objectives. . .
Specifically, it aims to:
2. Make credit available to support agriculture-
based livelihood/enterprises to ARB coops and
FAs in the ARCs and non-ARCs, which are
considered as non-bank eligible;

2. Provide ID technical assistance to ARB coops

and FAs to capacitate them in the operations
and management of their livelihood projects
and enterprises;
Program Objectives. . .

3. Provide ED technical guidance to ARB

coops and FAs to ensure adoption of
appropriate technology, establishment of
market linkages, and attain enterprise
effectiveness, efficiency, viability and
sustainability; and

4. Develop and Implement capacity

development/ handholding activities for
program implementers and other
stakeholders, to facilitate their provision of
technical support to ARB cooperatives and
farmers’ associations.
III. Expected Output
1. 308 ARB cooperatives/farmers’ associations provided
with credit (146 in ARCs and 162 in non-ARCs),
benefiting 40,818 ARBs;
2. 265 ARB cooperatives/farmers’ associations graduate
from the program starting year 3 and become bank
eligible;
3. 633 ARB Cooperatives/FAs (400 coops/FAs in CAP-
PBD WIII, 109 coops under CAP-PBD WI, 5 coops
under Window II & 119 organizations in 5:25:70)
provided with inst’l Dev’t interventions;
4. 231 enterprises established managed by 10,205 ARBs;
5. 4,617 ARB leaders and 350 field implementers trained
to provide technical support to ARB cooperative and
farmers’ associations.
IV. Program Components

1. Provision of credit

2. Institutional Development
3. Enterprise Development
4. Capacity Development of Program
implementers and partners
V. Implementing Structures
Central Office Level
1. National Project Management Committee
2. National Technical Review Committee
3. Program Secretariat

Field Level
1. Regional Project Management Committee
2. Provincial Project Management Committee
3. Program Secretariat
VI. Monitoring and Evaluation

• Program Monitoring and

Reporting
• Program Management Meetings
• Program Assessments
• Knowledge Management
VII. Fund Source and allocation
♦ Total Funds available – PhP233.141 M
CAP-PBD - PhP176.740 M
5:25:70 CPS - PhP 56.401 M
♦ Fund Allocation
a. Credit - P116.570 M (50%)
b. ID/ED/CAPDev’t - P116.570 M (50%)

> ID - P47.038 M (40%)

> ED - P30.317 M (30%)
> CAP-Dev’t - P19.556 M (17%)
> Prog. Mgt. - P15.815 M (13%)