Jollibee Group Foundation (JGF) has partnered with BanKo to launch a financing program for farmers under its Farmer Entrepreneurship Program. Photo shows the project presentation to farmers in San Jose City, Nueva Ecija.

MANILA, Philippines. 29 September 2023 – Jollibee Group’s social development arm, Jollibee Group Foundation (JGF), partnered with BanKo, the micro-finance arm of the Bank of the Philippine Islands (BPI), to launch a financing program that provides smallholder farmers under JGF’s Farmer Entrepreneurship Program (FEP) access to a low-interest loan product.

FEP is a comprehensive agro-entrepreneurship initiative that helps sharpen the technical skills and business acumen of farmers through training, mentorships, and technical and financial aids. FEP also links farmers to institutional markets, such as Jollibee, Greenwich, Chowking, and Mang Inasal, for increased and steady income.

“Our partnership with BanKo addresses the crucial need of our farmers to have access to loan products that will enable them to sustain and grow further their farming businesses,” said Gisela Tiongson, JGF President.

Since the inception of FEP, JGF has been partnering with different microfinance institutions that serve as local implementing partners on the ground. As such, these institutions get to directly engage with FEP farmers, with some availing of the financial services and products of such institutions. This partnership with BanKo further increases FEP farmers’ financial and investment choices so they can access other inputs they need to further increase crop yields and income.

Challenges in accessing formal financing

Tiongson explained that the experiences of farmer groups who are part of FEP show that despite having a stable buyer and partners, access to formal financing institutions is still uneven, and access to loans with low interest rates is limited.

“In the mid- to long-term, this challenge could constrain the ability of farmer groups to expand and sustain their enterprises. Without access to formal financing institutions, they often resort to borrowing from informal financial providers who require higher interest rates,” Tiongson said.

“Formal financial institutions often consider agriculture ventures as high-risk investments since they are vulnerable to natural calamities,” explained Rod Mabiasen, BanKo Business Head of Financial Inclusion and Microfinance Solutions. “But we, at BanKo, are strongly committed to our mandate of providing accessible and affordable banking to more Filipinos. We recognize that farmers play a very crucial role in growing our economy and promoting food security. This partnership with JGF enables us to help overcome the barriers to agricultural financing.”

JGF’s partnership with BanKo is the first program specifically designed to provide low-interest loan financing options to FEP partners to help them meet their working capital needs for various business expenses such as paying farm labor, renting agricultural equipment, transporting goods to the market, purchasing farm input, and making ends meet during low seasons, thereby improving their agricultural production.

“Under this program, the interest rates offered to FEP farmers are lower than the market rate and the farmers are only able to avail of it through a shared responsibility scheme. That is, each farmer has to put in his or her share to guarantee the low rate for the whole group to help foster genuine and inclusive progress within these communities,” added Tiongson.

Encouraging farmers today and tomorrow

The pilot phase of this program covers beneficiaries from onion farmer cooperatives of the Kalasag Multipurpose Cooperative and Onion and Vegetable Producers Cooperative (both from San Jose City, Nueva Ecija), and Alcala Onion Rice Corn Growers Multi-Purpose Cooperative (Alcala, Pangasinan).

Upon completion of the pilot phase, 100% of the farmer participants were able to repay their loans in full through their profits from this past onion season.

Alexander Gomez is one of the program’s farmer-partners in San Jose City. He is the vice chairman of Kalasag Multipurpose Cooperative and has been an onion farmer for 30 years.

Securing capital has been one of his priorities as the surging inflation continues to push the prices of agricultural inputs up. He took advantage of a BanKo loan opportunity to increase yields and income.

“Napakahalaga sa aming magsasaka ang puhunan pangsimula para makapagtanim. Nakakatuwa na may ganitong proyekto ang JGF at BanKo na malaking tulong sa amin,” he said. (It is crucial for us farmers to have capital so we can start planting. We’re very happy that JGF and BanKo have this project, which is a big help for us.)

Mary Ann Casita, manager of the Onion and Vegetable Producers Cooperative, is also optimistic that low-interest loan offering will help them cover the recurring business costs in agricultural production.

Before, farmers used to seek financial support from both rural banks that require collateral and informal money lenders that have higher interest rates.

“Masaya kami dahil sa mas mababang interest rate. Mas naengganyo rin ang mga miyembro namin dahil mas madali ang proseso. Sila mismo ang nagjujustify sa loan nila at sa kakayahan nilang magbayad,” she said. (We’re glad that the interest rate is lower. Our members are also encouraged because the process is easier. They themselves are able to justify how they will use the loan and their capacity to pay.)

She sees that more farmers may be inspired to expand or go back into the fields through this initiative.

“Sana ay mas matulungan kami na makahiram lahat para lalong sumigla ang aming mga miyembro, lalo at alam nila na nariyan ang mga tulad ng JGF at BanKo na umaalalay,” Casita added. (I hope everyone will be able to avail of the program to embolden our members, especially knowing that organizations like JGF and BanKo are there to support us.)

For its part, BanKo reaffirmed its commitment to inclusive banking by continuously providing support to microentrepreneurs.

“As the Philippines further recovers from the pandemic, we want to provide our farmers with the resources that will give them more flexibility to focus on improving their livelihood and making it more sustainable. Our dedicated BanKoMares and BanKoPares will guide them in taking the first step to achieve their financial goals to help them secure a better future,” said Mabiasen.

Other photos:

A BanKoPare guides farmer Alexander Gomez in filling out a loan application form. JGF and BanKo recently piloted a financing program for farmers under JGF’s Farmer Entrepreneurship Program.