Financial and Social Performance of ACPC's Production Loan Easy Access (PLEA) Program: the Case of Partner Cooperatives in CALABARZON
Date
6-2022
Degree
Bachelor of Science in Agribusiness Management
College
College of Economics and Management (CEM)
Adviser/Committee Chair
Arlene C. Gutierrez
Committee Member
Normito R. Zapata, Jr., Marjorie S. Florentino, Dinah Pura T. Depositario, Mar B. Cruz
Restrictions
Restricted: Not available to the general public and for consultation with the author/thesis adviser. Access is available only to those bound by the confidentiality agreement.
Abstract
In agricultural land and developing country like the Philippines, financing is still a challenge for the farmers. In the agribusiness framework, financing lies under the support subsystem which can be facilitated by government and institutions. In this light, an agency under the Department of Agriculture, Agricultural Credit Policy Council (DA-ACPC), tapped microfinance institutions (MFIs) such as cooperatives, cooperative banks, rural banks, non-government organizations/association, etc. to facilitate the loan program, Production Loan Easy Access (PLEA). This program was launched in 2016, but was implemented in 2017, to specifically cater the needs of the small farmers and fisher folks (SFFs).
Those MFIs who applied and were accepted are called Partner Lending Conduits (PLCs). In CALABARZON, there were nine (9) PLCs for PLEA. This region was selected as the locale of the study for this has the greatest of cooperatives in the country. Cooperatives were the majority of PLCs nationwide. Out of the nine (9) PLCs, seven (7) PLCs agreed to participate in this study. These are Salaban II Women's Multi-Purpose Cooperative, Tilambo Multi-purpose Cooperative, Rhudarda Multi-purpose Cooperative, Yakap at Halik Multi-purpose Cooperative !, Cooperative Bank of Quezon Province, Lupang Arenda Multi-Purpose Cooperative, and Rizal Rice Seed Growers Multi-Purpose Cooperative. Six (6) out these seven (7) PLCs are cooperative, while only one (1) is cooperative bank.
This study focused on the financial performance, and social performance. This was driven by several papers in the literature that says these two performances are the main objectives of MFIs. For the financial performance, measures such as Return on Equity, Return on Assets, Collection Efficiency, Current Ratio, Past Due Rate, and Debt-to-Equity Ratio were utilized to assess the financial health of PLCs. For the social performance, indicators such as the land area, the number of heads (for those involved in animal production), the weight of the boats (for fisher folks), the processing time (it took the PLCs to release funds to borrowers), and the income of the borrowers were evaluated to see how PLCs contributed to achievement of PLEA program goal, which was to provide for SFFs.
To give verdict if there had been a pattern - consistency of tradeoff between financial performance, and social performance, an integrative analysis had been conducted. For majority of the PLCs showed a consistency of patterns between overall financial performance, and PLEA financial indicators. This suggests that financial measures in specific program were reflected in the overall financial performance of the PLCs. For majority of the PLCs, there had been a consistency of patterns between overall financial performance and social performance. This suggests that PLCs had a greater chance of aligning their deeds to the goals of PLEA when they have a good financial performance standing. For majority of the PLCs, there had been a tradeoff happened between PLEA financial indicators, and social performance. It implies that as PLCs comply with the goal alignment of PLEA program, which was to cater small farmers, and fisherfolks (SFFs), the PLEA financial indicators including the repayment rate goes down. This means that as PLCs cate more SFFs, chances are high that the institutions incur default or unpaid loan amounts. This might be the driver why some of the PLCs chose to serve farmers who were not SFFs, having their hopes high that they would collect productively. Only one PLC recorded a consistency - consistent low on all areas.
Last, the underlying stories behind their experiences with such government loan program were also disclosed. To cite, problems that PLCs encountered include, limited amount of funds, long waiting time of disbursements (from Land Bank of the Philippines), long waiting time for release of insurance claims by Philippine Crop Insurance Corporation (PCICI) and the undesirable culture of borrowers.
Language
English
LC Subject
Cooperative societies--Finance--Case studies
Location
UPLB College of Economics and Management (CEM)
Call Number
LG 993 2022 M17 P36
Recommended Citation
Paner, Coleen J., "Financial and Social Performance of ACPC's Production Loan Easy Access (PLEA) Program: the Case of Partner Cooperatives in CALABARZON" (2022). Undergraduate Theses. 11854.
https://www.ukdr.uplb.edu.ph/etd-undergrad/11854
Document Type
Thesis
