Philippines' fastest growing integrated agricultural firm Agri Nurture Inc. (ANI) is investing P50 to P100 million in a farm input-lending "Agri Bank" in a massive effort to spur agricultural production, cut costs, and plow back benefit to cash-deficient farmers.

To be called the Agri Bank or ANI Bank or whatever the Bangko Sentral ng Pilipinas (BSP) will approve, the bank will be the first in the South East Asian region and is seen as an answer to the Filipino farmers' perennial quest to increase his productivity and modernize his farming system.

ANI's aggressive move into lending to Filipino farmers, often doubted by the financial and commercial banking sector and even by government agencies, has been prompted initially by the need to bring down cost.

"If our suppliers (farmers) borrow from five-six (usurious informal creditors), the high cost is charged to us. This is just an investment that will plow the money back to the organization. It's like we only made advances to farmers," said ANI Chief Executive Officer Antonio L. Tiu in an interview at the National Convergence Agri-Investment Forum.

Besides, the company, which is an exporter of mostly processed fruits to practically every continent of the world, can take advantage of lower price for volume purchase of its seed and fertilizer supply.
Also, a prevailing motive for putting up the Agri Bank is the call for a more equitable distribution of wealth.

"Our lending is not only after profit. We want to help farmers. You're making money, but you're suppliers are not making money. It's not fair. It doesn't feel good. You have to make everyone happy," said Tiu.

Interest rates for the bank's lending may just be at 10 to 12 percent per annum as the business is mainly focused on service to its suppliers. Loan amount may be P10,000 to P20,000 per farmers' group.

The company has a ready market for the lending through its existing 100,000 farmer-suppliers.

ANI wants to take advantage of the credit facility that it now has with suppliers of seeds and fertilizers which ranges from 90 to 120 days.

"We enjoy these credit facility because we're now big for our creditors. But our (farmer)-suppliers don't have that kind of access. We want to share it with them, so they can also grow," said Tiu who boasts that some of its highly-successful farmer-suppliers and farmer-seasonal employees have already become millionaires.

For some time, ANI which produces fresh and processed fruits (mango, pineapple, guava) has already been lending to its suppliers just as traders in the provinces are the creditors from whom cash-strapped farmers borrow. But this will be more massive which is why BSP registration is required.

"We're not lending cash. But the commodities we're lending have monetary value that can be quantified," he said.