RURAL FINANCE II

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Building on the achievements of the first rural finance Project the Second rural finance Project will help to expand the volume of medium and long term commercial credit to agriculture and rural development in the Philippines and to enhance the policy framework of the rural financial sector by: 1) supporting the development of the Land bank of the Philippines (LBP) two funds -- the Countryside Loan Fund (CLF) and the Retail Cofinancing Fund (RCF) to finance private sector investment in the rural areas; 2) strengthening LBP as the main wholesale financial institution serving the rural areas; and 3) upgrading the operational capacity of rural cooperatives, participating financial institutions, particularly thrift banks and rural banks, to provide financial services in the rural areas. The project comprises two major components. The first is a credit component for medium and long term loans to finance private investments in agricultural and other viable rural operations for a broad spectrum of agricultural and non-farm rural investment, processing, marketing, transport services, storage facilities, custom service of leasing operations and import of ciritical inputs. The second is an institutional strengthening program which will strengthen LBP financially and organizationally to ensure its sustainability in providing financial services to the rural population.