BY JOSE MAROMA JR.
IN HIS RECENT State of the Nation Address (SONA), the President scolded Landbank of the Philippines for its “lopsided” loan portfolio favoring the commercial sector over countryside borrowers which should be the principal beneficiaries.
I don’t know what the proportion is but I agree that Landbank needs to reorient itself to the primary purpose for which it was created – to help farmers and fishermen.
Last year, Landbank’s net income was a whooping P15.5 billion. It has displaced BPI as the third largest in assets, behind BDO and Metrobank. Loans to the agricultural sector have increased, but the proportion to the total loans continues to decline.
Of course, we understand that Landbank has to generate profits from the commercial sector to fund its rural-lending operations but it does not have to compete with other universal/commercial banks in profitability rankings. Being state-owned created to helping farmers, fishermen and land reform beneficiaries, it should not strive for pogi points in handsome yearend financial statements. After all, it has a captured, mandated base of government depositors.
I am sure that, after that scolding by the President, Landbank directors are at a frenzy working out massive rural loan programs which they will announce soon. I am sure these officers are working overtime lest they are replaced by retired generals. I would like to add a few suggestions.
Simplify the loan application process, lessen the paperwork. – I don’t know if times have changed but years back a friend who wanted to borrow from Landbank was asked to make a “project study.”
What’s that? I bet not even three percent of Landbank employees know how to make a project study, and you expect a bamboo craftsman who has not even finished high school to make one?
I suggest Landbank sends one loan officer to the site, interview the borrower and help him fill out the forms. This way the loan officer can have a first-hand evaluation of the merits of the loan application and the credit-worthiness of the borrower, besides facilitating the whole process.
Apply a higher threshold of credit risk-taking for farmer-borrowers. – You’ve got enough buffer to restructure or even write off non- performing loans.
Increase your ATM outlets. – Once I passed by the Landbank branch on Iznart Street, Iloilo City at 6 a.m. on a payday and I saw a long line at the ATM machines. I figured that, maybe, the line must have started at 5 a.m. Most of them must have been beneficiaries of the conditional cash program known as 4Ps.
Some had to walk across the street to withdraw from the ATM of a commercial bank, thereby incurring fees. This picture is worse in interior towns with long lines under the heat of the sun at midday.
Why not eliminate the P100 interbranch transaction charge when one withdraws from a branch other than one’s own depository? – I always had issues with this practice of most banks because, with advanced information technology, I don’t think the administrative costs associated with interbranch transaction is worth P100.
I can’t say this to other commercial banks but I can say this to Landbank because I am a taxpayer and a stakeholder./PN