Microfinance Program for MFI Retailers
Program Title: Microfinance Program for Microfinance Institutions (MFI) Retailers
Program Objectives:
General:
- To support government efforts to alleviate poverty by empowering the marginalized sector towards economic growth.
Specific:
- To expand the Bank's outreach to the poor who do not have access to the formal financial system;
- To promote the active participation of microfinance institutions in the credit delivery system;
- To promote savings mobilization of poor households; and
- To strengthen partner-MFIs in its microfinance operations and help deliver capability building support to micro-enterprises.
Mode of Credit Delivery: Landbank will provide funds to MFI-Retailers which in turn lend the same to micro loan sub-borrowers.
Program Conduits: As wholesaler of funds, the LBP will tap the following entities as microfinance program conduits.
- Cooperatives (Coops)
- Countryside Financial Institutions (CFIs)
- Non-Government Organizations (NGOs)
Eligibility Requirements for the MFI-Retailers:
- Passed the Risk Asset Acceptance Criteria (RAAC) of the bank;
- New MFIs and other MFIs without existing credit line / loan with PCFC or existing MFI clients of PCFC whose credit requirement is in excess of P100 million;
- Duly registered with CDA in case of coops; BSP and SEC in case of CFIs ; and SEC in case of NGOs;
- With at least three (3) consecutive years experience in lending, one year (most recent) of which is on microfinance operations;
- With audited financial statements (FS) for the last three (3) years (audit conducted by an external auditor);
- With capacity to engage in microfinance, as evidenced by the following:
- Functioning MIS/ loan tracking system (will allow regular monitoring of microfinance operations as evidenced by timely generation of basic financial, loans tracking, and aging reports using Portfolio at Risk {PAR});
- With savings mobilization program and microfinance guidelines/ operations manual in place;
- With microfinance business plan for at least three (3) years as approved by its Board of Directors;
- At least two (2) members of its Board of Directors (BOD) / officers with one (1) year experience in microfinance and/or intensive training on microfinance (minimum of 7 days training) in accredited/ reputable training institutions;
- With a separate unit to handle microfinance operations;
- At least three (3) full-time and trained microfinance officers/staff (minimum of 5 days microfinance training in accredited/reputable training institution/s); and,
- With a continuing staff development/training program on microfinance.
Credit Facilities Available to Eligible MFIs:
- Short Term Loan : Working Capital and Rediscounting
- Term Loan
Terms/Requirements:
Amount: Short Term Loan / Term Loan
- For Coops - up to 6 times of its networth
- For CFIs - not to exceed its AERA
- For NGOs - should be equal to the requirement of borrowers but not to exceed twice its existing loanable funds (exclusive of borrowings)
Interest Rate:
- Short Term Loan - 91-day T-bill rate + 3% per annum, or 9.5% per annum, whichever is higher. (Aligned with the SULONG rate for short-term PNs, which is set every quarter.)
- Term Loan - 12% + 1% service fee per annum
Rediscounting Rate: Up to 85% of the current outstanding balance of the PNs rediscounted.
Term / Availability:
- Short Term Loan - One (1) year credit line/Up to 360 days PNs
- Term Loan - Up to five (5) years / Maximum of 3 tranches, but to be availed within one year from the date of signing of loan agreement.
Collateral Requirement:
Short Term Loan
- Working Capital - REM or Hold-out on deposit, and/ or government securities for coops and NGOs with PESO rating of 70 to less than 80, and CFIs with CAMELS rating of 3 to less than 4. JSS and Post Dated Checks (PDCs) for coops and NGOs with PESO rating of at least 80; and CFIs with CAMELS rating of at least 4.
- Rediscounting - Assignment of sub-PNs, including sub-borrowers' underlying collaterals; Guarantee cover, if any; JSS of principals; Post Dated Checks (PDCs)
Term Loan - REM or Hold-out on deposit, and/or government securities.
Contact Details:
Land Bank of the Philippines
Program Management Department (PMD)
1598 M.H. Del Pilar cor. Dr. J. Quintos Sts., Malate, Manila
Phone: (02) 522-0000, 551.2200 locals 2650, 2589
Direct Line: (02) 405-7309/7427
Fax: (02) 528-8541/42/43
E-mail: sme-pmu@mail.landbank.com
Recent Posts
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- MFI Employees Loan Facility
- Micro-Housing Loan Facility
- Micro-Energy Credit Program
- Livelihood Development Program for OFWs
- Microfinance Eco-Enterprise Program
- Microfinance Program for NGOs and Cooperatives
- Self-Employment Assistance Program
- Microfinance Program for Rural Workers
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