In response to the needs of GFC farmers for provisions of farm equipment and greenhouses, SSEVI extended a PhP300,000 zero rated loan to GFC farmers. GFC is a social enterprise that implements community shared agriculture. It supports around 20 farmers in Capas, Tarlac by directly linking them to socially aware and health conscious consumers in Metro Manila. SSEVI provides technical assistance to GFC and at the same time an equity investor.
Through the loan, it is hoped that GFC farmers will be able to at least maintain their level of production even in summer when water is scarce and during the rainy season. It would hopefully enable them to adapt to climate change through the loan and technical assistance from GFC. The loan is zero rated since based on the cash flow analysis of the farmers personal finance, the farmers would not be able to bear the cost of funds due to low productivity. In the next one to two years, interest would be charged to the farmers once they get to the level of increasing their productivity. This would make the product design market-based and sustainable in the long run.
The loan product is flexible. There is no fixed amount of installment or amortization to the farmers. Instead, 15% of the value of their sales to GFC will be used as payment. This will ensure that the farmer will still have enough take home pay to provide for the needs of their households. With this system, the loan term varies from one year to two years depending on the loan size and the productivity of the farm. Loan collection is done every week when farmers deliver their vegetables to GFC.
Before loans were released, SSEVI conducted financial literacy training to the farmers to ensure that they have knowledge on savings, budgeting and debt management. The training was conducted on a makeshift venue with only a beach umbrella as shield from the sun. One participant said that she was sometimes distracted by the animals and birds around. In spite of this, most of them said that they learned how to budget better and realized the importance of saving for emergency. They also said that the SSEVI staff clearly explained the concepts. Denise Subido and Clarice Crisostomo, Senior Program Officer and Program Officer respectively, delivered the training to the farmers. The farmers gave them a perfect evaluation.