The People’s Credit and Finance Corporation is envisioned to be the viable and sustainable leader in the provision of financial products and services to generate income opportunities and improve the lives of the poor. In order promote this vision, the PCFC has formulated the Microfinance Loan Program.
NGOs, Coops and FIs are the eligible borrowers as long as they meet the following conditions:
- duly organized, with a track record of lending operations;
- with proven capabilities in implementing micro finance programs for the poor; and
- must pass the following performance criteria:
I. Institutional Criteria
- Duly registered with either Securities and Exchange Commission (for NGOs), Coperative Development Authority (for Coops) or Bangko Sentral ng Pilipinas (for Rural, Thrift and Coop Banks);
- Track record of at least 3 years in lendingoperation of the institution or at least 2 of its key officers/board members have microfinance experience;
- Credible and competent Board of Directors;
- Presence of full time core management team;
- Presence of a separate unit for the program with full time staff with basic background on credit and financial management;
- Presence of a savings mobilization program;
- Presence of a staff development program;
- Presence of an MIS, Accounting and Internal Control System; and
- No major exceptions per most recent audit nor adverse credit information/findings.
II. Financial Criteria
- Total resources of at least Php 5.0Mn, networth of at least Php 2.0Mn
- Not less than 10% Capital-to -Risk Assets Ratio after PCFC and other creditors
- Profitable for the last 3 years
III. Lending Performance Criteria
- Has at least 500 existing borrowers for Coops and Banks;
- Collection rate of at least 85% in all lending programs;
- 95% collection rate for microfinance program;
- Past due rate of not more than 20% on overall lending operations for banks; not more than 13% in the PCFC Program;
- For WB-MLF Financed Subsidiary Loans: (additional criteria) – Net past due to equity (NPDE) ratio not exceeding 15%. A higher NPDE ratio of not more than 35% may be acceptable provided a written commitment/action plan would be required to gradually reduce the ratio to the desired 15% by December 31, 2005.
Other Requirements to be Submitted
- Information on the organization including plans and programs
- Certificate of Registration, Articles of Incorporation and By-laws
- Information Sheet on the members of the Board of Directors and Principal Officers
- Audited Financial Statements for the last 3 years
- Credit Application Form
- Board Resolution authorizing the Borrowing and the officers to sign loan applications and other loan documents
Loan sizes for sub-borrowers organized in groups or centers start from Php 3,000.00 gradually increasing per loan cycle to Php 150,000.00. For Individual borrowers, loan size may range from Php 10,000.00 to Php 150,000.00 depending on the project requirements.
Types of Qualified Projects
The type of projects will depend on the needs and capabilities of the sub-borrower or clients. The client shall decide on the type of projects to be undertaken with the program partner and advising him in determining the viability of the project. The following are the guidelines in project identification:
- Viable and has a ready market for the product or service.
- Able to generate income for the clients within a short period of time, i.e. daily, weekly, monthly cash flows.
- Within the capability of the clients to manage.
- Able to generate savings for the clients.
- Complies with all government rules and regulations.