Financing Programs Loans and Financing Programs for Micro, Small and Medium Enterprises

GSIS Family Bank Microfinance Lending Program

Program Title: GSIS Family Bank Microfinance Lending Program

Primary Structures: Self-help groups (SHGs) are the primary structures utilized by this microfinance program. An SHG is composed of 5 persons who do weekly meetings together with other 5 to 6 SHGs to form a center.

The SHG/center serves as the venue for collection of credit, savings deposit generation and the delivery of other services. It also serves as venue for the monitoring of projects and the expressions of concern for the members of the program.

Program Objectives:

• To introduce an accessible and affordable alternative credit system for the urban and rural poor for the financing of income-operating activities.
• To encourage the poor to use their time, effort and talents productively.
• To empower women through their involvement in economic activities and their participation in decision-making process.
• To reduce dependency on moneylenders who charge high interest rates and on dole outs and other forms of political patronage.

Eligible Borrowers:

• At least 18 years old but not more than 65 years old, preferably women. A student or an employed person cannot become a borrower since the livelihood activities require full-time responsibilities.
• Must have stayed in the present residence for at least one (1) year and is known in the community.
• Must be of good moral character as attested by the co-members.
• Must be poor, who is engaged in livelihood activities.

Eligible Projects:

• As a general rule, the business to be financed has to be existing for at least a year.
• Any micro-enterprise/livelihood activity (trading, services, vending) that can generate immediate additional income.
• Project(s) which is/are within the capacity of the borrower to manage.
• Must be a legal activity.

Terms/Requirements:

Amount:

• First Loan Cycle - P6,000.00 to maximum of P10,000.00
• Second Loan Cycle - Maximum of P15,000.00
• Third Loan Cycle - Maximum of P20.000.00
• Fourth Loan Cycle - Maximum of P25.000.00
• Fifth Loan Cycle - Maximum of P30.000.00
• Sixth Loan Cycle - Maximum of P40.000.00
• Seventh Loan Cycle - Maximum of P50.000.00

The general rule in determining the amount of the loan shall be the requirement and viability of the proposed livelihood project and acceptance of the responsibility of the group members. Moreover, for the succeeding loan, the amount shall also be based on: 1) repayment performance of the borrower, 2) attendance during weekly meetings, 3) improvement of livelihood activities, 4) improvement of savings deposits, and 5) relationship with the group.

Interest and Service Charges: interest rate of 3% per month and a one-time service charge of 2% per cycle.

Individual Savings Requirement: For every loan that is to be granted, the borrower shall be encouraged to save at least 20% of the loan availed of at the end of the term. These savings may be pre-deducted upon the release of the loan or amortized weekly together with the loan. Withdrawal from this savings shall be discouraged, except for meritorious reasons and such amount withdrawn must be returned on or before the end of the term.

Loan Duration: 24 weeks (6 months). The term may be shortened to 12 weeks if at the start of the training the group agrees to shorten the loan period, if the cash flow would show the ability of the borrowers to pay the weekly amortization.

Mode of Payment: Payable in weekly amortizations.

Security: As much as possible, no collateral shall be required from the borrowers
except the following:

• Secure the signatures of all her co-group and center members as joint and several co-makers.
• A Deed of Assignment of deposit and authority to debit to authorize the bank to apply the savings against the loan in case of default.
• The borrower must be covered by an accredited insurance company.
• Strictly abide with the policies and guidelines of the microfinance program.

Documentary Requirements:

• Offering Memo (Credit Proposal) .     Loan Application
• Project Proposal
• Notarized Loan Contract
• Promissory Note
• Authority to Debit
• Barangay Clearance
• Savings Account Opening Forms
• Credit Implementation Ticket

Contact Details:

GSIS Family Bank
165 Real Street Pamplona, Las Pinas City
Ms. Susan R. Maligaya
Microfinance Unit
Phone:  (02) 873-0915/0379/0469 local 122
Fax:       (02) 873-0119/5924