TARGET MICROFINANCE INSTITUTIONS
- Small and Emerging Microfinance Institutions Willing to Undergo Capacity Building
- Strong Social Mission
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LOAN AMOUNT
- Up to 15% of the MFI's net loan portfolio
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INTEREST RATE
- 13% to 24% per annum depending on the credit appraisal of the MFI
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LOAN TERM
- Six (6) Months to Three (3) Years
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REPAYMENT MODALITY
- Monthly or quarterly payments through post dated checks
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SECURITY
- Any of the following: (a) Deed of Assignment of Receivables; (b) Deed of Assignment of Deposits; (c) Deed of Assignment of Stocks or Government Bonds; and (d) Deed of Assignment of Inventory or Properties
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LOAN APPLICATION REQUIREMENTS
- Certified True Copy of the Certificate of Registration
- Certified True Copy of the Articles of Incorporation
- Certified True Copy of the By Laws
- Audited Financial Statements for at least the Last Two Years
- Interim Financial Statements
- Notarized Board Resolution Authorizing the following: (a) the transaction being applied to with SEDPI Capital; (b) designating the official representatives of the organization to transact business with SEDPI Capital; and (c) certifying the incumbency of all signatures
- List of Donors/Creditors and Funds Received from the Last Two Fiscal Years
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The Social Enterprise Loan aims to make available affordable credit to microentrepreneurs classified as the missing link in the Philippine microfinance industry. These are microenterprises that are not serviced by the commercial financial sector due to their inability to produce collateral; and are also not serviced by microfinance institutions because they generally need larger loan amount. The aim of the social enterprise loan is to expand their present business activities and increase their incomes. It focuses on microenterprises that are involved in business activities that have good potential for expansion, generate employment and at least adopt a second bottom line other than financial sustainability. |
TARGET CLIENTSPOLICY
Microenterprises that meet the following criteria will be eligible to avail of the product:
- Registered legal entity existing for at least two years – could either be sole proprietor; self-employed; cooperatives or corporations
- Existing business implemented at least in the last two years
- Presence of full time staff dedicated to operate business
- Presence of acceptable accounting and internal control system
- Board of directors who provide proper governance and able to set long term direction of the organization
- Adopt a second bottom line other than financial sustainability such as: employment of low-income households; education; preservation of the environment etc.
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INTEREST RATE
- 24% to 36% per annum (flat rate) depending on the of the credit and background investigation; and debt capacity analysis of the microenterprise.
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LOAN TERM
- Six (6) months to Two (2) years
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REPAYMENT MODALITY
- Weekly, Twice a Month or Monthly Payments
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SECURITY
- Clients are required to have one of the following guarantees for their loans: (a) Deed of Assignment of Receivables; (b) Deed of Assignment of Stocks or Government Bonds; (c) Deed of Assignment of Inventory or Properties; and (d) Co-makers who can be anyone of the following: Individuals (friends, neighbors, and relatives) not living with the applicant who are willing and have a sufficient and stable source of income to repay the loan, in case the client is unable to do so; Other clients receiving social enterprise loans; and One co-maker is required for loans less than 150,000. Two co-makers are required for loans >150,000
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LOAN APPLICATION REQUIREMENTS
- Any form of identification
- Business license or registration, if any
- Stall holder lease agreement, if any
- Last three months utility bills for light and water (required)
- Certified True Copy of the Articles of Incorporation or Cooperation (if applicable)
- Certified True Copy of the By Laws (if applicable)
- Audited Financial Statements for at least the Last Two Years (if an organization)
- Interim Financial Statements for organizations and cash flow form if individuals
- Statement of deposit account in the last three months (from banks or cooperatives)
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