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

Workers’ Microfinance Program

Program Title:   Workers' Microfinance Program (KALINGA para sa mga Manggagawa Fund)
Program Objectives:

• To alleviate poverty among target workers through micro entrepreneurial activity;
• To support employment generation and promotion of workers entrepreneurship; and
• To facilitate the access of workers to credit services to finance their livelihood and entrepreneurial activities.

Eligible Sub-Borrower:

• Displaced workers in the formal, informal, and public sector;
• Workers with existing micro-enterprise venture needing expansion; and
• Workers with no existing micro-enterprise but:
  • Are willing to engage in such endeavor;
  • Have participated in appropriate livelihood/entrepreneurial training;
• At least one (1) year residency in the area;
• The micro-enterprise should have weekly or daily income;
• Must be 18-65 years old;
• One member per household can apply;
• Not presently employed or has no full-time employment;
• No existing loan with a microfinance institution (MFI)/People's Credit and Finance Corporation (PCFC); and
• Household monthly income of not more than P10,000 or below the poverty threshold.

Eligible Sub-Projects:

• Handicraft and small manufacturing (i.e. rug making, basket making, etc.);
• Services (i.e. tricycle operation, barber/parlor shop, repair shop, etc.)
• Food production/processing (i.e. meat processing, candy making, bakery, etc.)
• Small agribusiness projects (i.e. small piggery/poultry, cutflower production) and production loan for non-traditional crops (i.e. vegetables) but should be supplemented by a business activity which yields a daily income; rice and corn and other traditional crops are excluded; and
• Market vending and small trading (i.e. sari-sari store, fish, vegetables vending)

Loan Purpose:  Financing of livelihood and entrepreneurial activities

Terms/Requirements:

Amount:

• 1st loan - not more than P6.000.00
• 2nd loan to subsequent loans - upon evaluation of the MFIs, based on the previous performance of the sub-borrower
• A gradual increase may be given subject to the needs of the borrower and should be supported by a cash flow statement.
• The maximum loan amount is P150,000.00.

Interest Rate:   Shall be based on  market rate

Maturity / Repayment: Shall be based on the sub-projects cash flow and the sub-borrowers' overall repayment capacity.

Procedure:

Step 1:  Worker/Sub-borrower fills up registry form in the Public Employment Service Offices (PESO) located in all Municipal and Provincial government offices, DOLE Regional Offices and attached agencies.

Step 2:  DOLE ROs and attached agencies or PESO evaluate and refer application to any PCFC-accredited microfinance institution (MFI) operating in the area.

Step 3:

• MFI conducts credit investigation.
• Qualified sub-borrower is advised to attend compulsory group training.
• If borrower passes examination, loan is released.

Step 4:    DOLE-ROs and attached agencies/PESOs monitor results of referrals.

Contact Details:

Department of Labor and Employment - Bureau of Rural Workers (DOLE-BRW)
9F, G.E. Antonino Building, T.M. Kalaw and J. Bocobo Streets, Ermita, Manila
Phone:  (02) 527.5857, 404.3336
Fax:      (02) 527.5858
E-mail:  brwmain@meridiantelekoms.net
Web: www.brw.dole.gov.ph