SBGFC Micro Finance Program Micro Finance ProgramSBGFC As funded by a US$15Million ODA loan from...

SBGFCSBGFC Micro Finance ProgramMicro Finance Program

SBGFCSBGFC Micro Finance ProgramMicro Finance Program

As funded by a US$15Million ODA loan from International Fund for Agricultural Development (IFAD)

As funded by a US$15Million ODA loan from International Fund for Agricultural Development (IFAD)

Our Objective Our Objective

Reducing Reducing poverty poverty through through Micro Micro Finance.Finance.

Reducing Reducing poverty poverty through through Micro Micro Finance.Finance.

Micro Finance ProgramMicro Finance Program

The SBGFCMicro Finance ProgramThe SBGFCMicro Finance Program

Lending guidelines is differentiated based on the category or nature of operation of the conduit.

Large, focused, well established MFIs shall be allowed higher loan limits relative to young, small micro-finance providers.

Eligibility criteria for large conduits is stricter, but has wider incentives in terms of loan terms including pricing.

Lending guidelines is differentiated based on the category or nature of operation of the conduit.

Large, focused, well established MFIs shall be allowed higher loan limits relative to young, small micro-finance providers.

Eligibility criteria for large conduits is stricter, but has wider incentives in terms of loan terms including pricing.


Participation by small conduits in the poorest provinces, as identified by IFAD thru its Rural Micro Enterprise Promotion Program (RuMEPP), shall be allowed through a relaxation of the eligibility criteria.

SBGFC will assist small conduits in their capability-building requirements thru the technical assistance component of the IFAD loan.

Participation by small conduits in the poorest provinces, as identified by IFAD thru its Rural Micro Enterprise Promotion Program (RuMEPP), shall be allowed through a relaxation of the eligibility criteria.

SBGFC will assist small conduits in their capability-building requirements thru the technical assistance component of the IFAD loan.


Target end-borrowers are pre-enterprise pre-enterprise microsmicros, which are either:

Target end-borrowers are pre-enterprise pre-enterprise microsmicros, which are either:

Start-up micro entrepreneurs Not registered With no or limited credit and livelihood track record No tangible business assets

Graduating micro entrepreneurs Willing to register as an enterprise Have a livelihood track record of at least one year Have a credit track record with an MFI With some tangible business assets

Start-up micro entrepreneurs Not registered With no or limited credit and livelihood track record No tangible business assets

Graduating micro entrepreneurs Willing to register as an enterprise Have a livelihood track record of at least one year Have a credit track record with an MFI With some tangible business assets

Micro Finance Facilities

MICRO-LEAD Lending through Lead Microfinance Institutions

MICRO-LOCAL Lending through MSME Rural Banks

MICRO-LEAP Lending through Small Microfinance Providers

Micro Finance Facilities

MICRO-LEAD Lending through Lead Microfinance Institutions

MICRO-LOCAL Lending through MSME Rural Banks

MICRO-LEAP Lending through Small Microfinance Providers

The SBGFC The SBGFC Micro Finance FacilitiesMicro Finance FacilitiesThe SBGFC The SBGFC Micro Finance FacilitiesMicro Finance Facilities

MICRO-LEADMICRO-LEADMICRO-LEADMICRO-LEADLending thru lead micro finance institutions whose

lending portfolio and organizational structure are predominantly or at least 60% micro finance.

Lending thru lead micro finance institutions whose lending portfolio and organizational structure are

predominantly or at least 60% micro finance.

Micro Finance Micro Finance Facility-Facility-MICRO-LEADMICRO-LEAD


Target ConduitsTarget Conduits

Medium and large microfinance institutions (MFIs) Medium and large microfinance institutions (MFIs)

Purpose of LoanPurpose of Loan

Retail re-lending to micro borrowers

Wholesale re-lending to MFIs

Retail re-lending to micro borrowers

Wholesale re-lending to MFIs



Loan AmountLoan Amount

Medium MFIs

- Minimum of P3 Million- Maximum of P50 Million on the first year - Maximum of P100 Million on succeeding years

Large MFIs


Medium MFIs


Large MFIs


Line DrawdownLine Drawdown

Minimum of 5%, up to 20% of credit line per drawdown Minimum of 5%, up to 20% of credit line per drawdown



Term and Line ExpiryTerm and Line Expiry

One year credit line, subject to renewal

One year only; may be up to 2 years, but only if justified by nature of micro-borrowers’ business as in the case of graduating micros



Repayment Term per DrawdownRepayment Term per Drawdown

360 days, payable quarterly 360 days, payable quarterly

SecuritySecurity

Continuing Surety Agreement on principals Continuing Surety Agreement on principals



Minimum Qualifications of MFI-Borrower Minimum Qualifications of MFI-Borrower

Eligibility Eligibility

CriteriaCriteriaMedium-sized Medium-sized

MFIsMFIsLarge-sized Large-sized

MFIsMFIs

Years in microfinance At least 3 At least 10

No. of borrowers At least 3,000; at least 10 conduits,

if wholesaler

At least 20,000; at least 20 conduits, if wholesaler

Manpower At least 20; at least 10,

if wholesaler

At least 100; at least 20,

if wholesaler

Microfinance portfolio

At least 60% At least 60%



Minimum Qualifications of MFI-Borrower Minimum Qualifications of MFI-Borrower

Financial Financial

RatiosRatiosMedium-sized Medium-sized

MFIsMFIsLarge-sized Large-sized

MFIsMFIs

Current Ratio 1.2; 1.0, if bank

1.2;1.0, if bank

Capital Adequacy Ratio

At least 20% (10% if bank, per BSP guidelines)

At least 20% (10% if bank, per BSP guidelines)

Microfinance Portfolio at Risk (PAR)*

Not more than 10%

Not more than 8%

MFIs in the RuMEPP priority provinces that do not pass the PAR requirement may still be considered for accreditation if they have a CAR of not less than 20% and a PDR of not more than 10%


MICRO-LOCALMICRO-LOCALMICRO-LOCALMICRO-LOCALMicro lending thru MSME-oriented rural and

cooperative banks.Micro lending thru MSME-oriented rural and

cooperative banks.

Micro Finance Micro Finance Facility-Facility-MICRO-LOCALMICRO-LOCAL



Rural Banks

-may be start up in micro finance

Cooperative Banks

Rural Banks

-may be start up in micro finance

Cooperative Banks


Retail re-lending to micro borrowers Retail re-lending to micro borrowers




Minimum of P200 Thousand

Maximum of P50 Million on the first year

Maximum of P100 Million on the succeeding years






Maximum of 20% of credit line












SecuritySecurity

Continuing Surety Agreement on principals (must)

Hard collateral may be required if start up in microfinance


Hard collateral may be required if start up in microfinance



Minimum Qualification of MFI-BorrowerMinimum Qualification of MFI-Borrower

1. Track record - at least 3 years as a bank; may be on start up basis in microfinance

2. Microfinance clients - At least 50; if start up, must plan for at least 50

3. Manpower – At least 3 exclusively for microfinance operations; if start up, should plan for at least 3

4. Asset size – Should conform with BSP guidelines

5. CAMELS rating – At least “3”

1. Track record - at least 3 years as a bank; may be on start up basis in microfinance

2. Microfinance clients - At least 50; if start up, must plan for at least 50

3. Manpower – At least 3 exclusively for microfinance operations; if start up, should plan for at least 3

4. Asset size – Should conform with BSP guidelines

5. CAMELS rating – At least “3”




6. Financial ratios

Current Ratio – At least 1.0

Capital Adequacy Ratio (CAR) – At least 10% (per BSP guidelines

Microfinance Portfolio at Risk (PAR) - Not more than 10%

Past Due Rate – Should not exceed 20%, preferably within industry average

6. Financial ratios


Capital Adequacy Ratio (CAR) – At least 10% (per BSP guidelines

Microfinance Portfolio at Risk (PAR) - Not more than 10%

Past Due Rate – Should not exceed 20%, preferably within industry average

MICRO-LEAPMICRO-LEAPMICRO-LEAPMICRO-LEAPMicro lending thru small microfinance providers such as

community cooperatives and local non-government organizations (NGOs) or people’s organizations (POs)

who do not meet the SBGFC standards under Micro-LEAD.

Micro lending thru small microfinance providers such as community cooperatives and local non-government

organizations (NGOs) or people’s organizations (POs) who do not meet the SBGFC standards under

Micro-LEAD.

Micro Finance Micro Finance Facility-Facility-MICRO-LEAPMICRO-LEAP



Small Community Cooperatives

Small Non-Government Organizations (NGOs)

People’s Organizations (POs)

Lending Companies

Small Community Cooperatives

Small Non-Government Organizations (NGOs)

People’s Organizations (POs)

Lending Companies


Retail re-lending to micro borrowers Retail re-lending to micro borrowers





One year only; may be up to 2 years, only if justified by nature of micro-borrowers’ business as in the case of graduating micros


One year only; may be up to 2 years, only if justified by nature of micro-borrowers’ business as in the case of graduating micros



SecuritySecurity


Hard collateral may be required on case to case basis


Hard collateral may be required on case to case basis



Minimum Qualifications of MFI-BorrowerMinimum Qualifications of MFI-Borrower

1. Asset size – At least P500 Thousand (P1.5 Million for lending companies)

2. Net Worth – At least P300 Thousand

3. Track record - at least 1 year microfinance operations (at least 3 years for lending companies)

4. Microfinance clients - At least 20 micro borrowers

5. Manpower – At least 2, one of whom may be part-time

1. Asset size – At least P500 Thousand (P1.5 Million for lending companies)

2. Net Worth – At least P300 Thousand

3. Track record - at least 1 year microfinance operations (at least 3 years for lending companies)

4. Microfinance clients - At least 20 micro borrowers

5. Manpower – At least 2, one of whom may be part-time




6. Financial ratios


Capital Adequacy Ratio – At least 20%

Microfinance Portfolio-at-Risk (PAR) * – Not more than 10%

Past Due Rate – Not more than 20%

6. Financial ratios


Capital Adequacy Ratio – At least 20%

Microfinance Portfolio-at-Risk (PAR) * – Not more than 10%

Past Due Rate – Not more than 20%



MICRO-LEAD Minimum - Maximum - MICRO-LOCAL Minimum -

Maximum -

MICRO-LEAP Cooperatives -

Other Conduits -

MICRO-LEAD Minimum - Maximum - MICRO-LOCAL Minimum -

Maximum -

MICRO-LEAP Cooperatives -

Other Conduits -

Interest RatesInterest Rates

9.5% p.a.9.5% p.a.9.7% p.a.9.7% p.a.

9.5% p.a.9.5% p.a.11.0% p.a.11.0% p.a.

11.0% p.a.11.0% p.a.10.5% p.a.10.5% p.a.

(Starting Nov. 23, 2007)(Starting Nov. 23, 2007)

Service FeesService Fees

FEESFEES

Micro Finance FacilityMicro Finance Facility

MICRO-LEADMICRO-LEAD MICRO-LOCALMICRO-LOCAL MICRO-LEAPMICRO-LEAP

Evaluation Fee 0.05% of approved credit line but not less than P3,000

0.1% of approved credit line but not less than P3,000

0.2% of approved credit line but not less than P3,000; 0.5% for lower classification conduits

Processing Fee 0.1% of loan availment

0.25% of loan availment but not less than P1,000

0.5% of loan availment but not less than P1,000

Out-of-Town Fee

None for MFIs based in Metro Manila, Cebu and Davao CityP2,000 for CALABAR and Region 3 provincesP4,000 or actual airfare for the rest of the country

Pass-on Rate Incentive

Pass-on Rate Incentive

Incentive is given to MFI conduits whose average monthly pass-on rate, inclusive of service fees, is kept at

2.5% for retailers

1.2% for wholesalers

Incentive is given to MFI conduits whose average monthly pass-on rate, inclusive of service fees, is kept at

2.5% for retailers

1.2% for wholesalers

Evaluation and availment processing fees, which are deducted from MFI’s loan proceeds, will be returned in a form of a rebate upon credit line renewal.

Evaluation and availment processing fees, which are deducted from MFI’s loan proceeds, will be returned in a form of a rebate upon credit line renewal.

Documentary Documentary RequirementsRequirementsDocumentary Documentary RequirementsRequirements

1. Accomplished Loan Application Form (SBGFC form)

2. Notarized Client Information Sheet with 1x1 recent ID picture of each principal stockholder/officer (SBGFC form)

3. Business registration papers

4. Board Resolution to borrow and on authorized signatories with specimen signature/s

5. Audited Financial Statements for the past 3 years, if applicable

6. Latest interim Financial Statements (not more than 6 months old)

1. Accomplished Loan Application Form (SBGFC form)

2. Notarized Client Information Sheet with 1x1 recent ID picture of each principal stockholder/officer (SBGFC form)

3. Business registration papers

4. Board Resolution to borrow and on authorized signatories with specimen signature/s

5. Audited Financial Statements for the past 3 years, if applicable

6. Latest interim Financial Statements (not more than 6 months old)

Upon Application/Line AccreditationUpon Application/Line Accreditation


7. Organizational Structure/Background Information

8. Schedule of borrowings including repayment term, collateral cover and credit status

9. Certificate of Good Standing from creditors (if applicable)

10.Aging of loan portfolio

11.Schedules of the following: Past due loans Microfinance PAR, if applicable Loan-loss provisioning

7. Organizational Structure/Background Information

8. Schedule of borrowings including repayment term, collateral cover and credit status

9. Certificate of Good Standing from creditors (if applicable)

10.Aging of loan portfolio

11.Schedules of the following: Past due loans Microfinance PAR, if applicable Loan-loss provisioning


1.1. Updated financial statements Updated financial statements (with MF-PAR schedule, if applicable)(with MF-PAR schedule, if applicable)

Strictly not more than 2 months old from date of loan availment and Strictly not more than 2 months old from date of loan availment and

should reflect past 20% availmentshould reflect past 20% availment

2.2. Sub-borrower validationSub-borrower validation** report, to be done by SBGFC Monitoring report, to be done by SBGFC Monitoring

Dept. Dept. (for conduits with at least P2.0 Million credit line only)(for conduits with at least P2.0 Million credit line only)

Large MFIs – – every 20% or P5 Million availment, whichever is higherevery 20% or P5 Million availment, whichever is higher

Medium-sized MFIs – – every 20% or P1.5 Million availment, every 20% or P1.5 Million availment, whichever is higher whichever is higher

Lower qualification conduits – – every 20% or P2.0 Million every 20% or P2.0 Million availment, whichever is higheravailment, whichever is higher

*Validation of at least 20% of the number of sub-borrowers based on the *Validation of at least 20% of the number of sub-borrowers based on the liquidation report submitted by the MFI or 20 sub-borrowers, whichever is liquidation report submitted by the MFI or 20 sub-borrowers, whichever is lower.lower.

1.1. Updated financial statements Updated financial statements (with MF-PAR schedule, if applicable)(with MF-PAR schedule, if applicable)

Strictly not more than 2 months old from date of loan availment and Strictly not more than 2 months old from date of loan availment and

should reflect past 20% availmentshould reflect past 20% availment

2.2. Sub-borrower validationSub-borrower validation** report, to be done by SBGFC Monitoring report, to be done by SBGFC Monitoring

Dept. Dept. (for conduits with at least P2.0 Million credit line only)(for conduits with at least P2.0 Million credit line only)

Large MFIs – – every 20% or P5 Million availment, whichever is higherevery 20% or P5 Million availment, whichever is higher

Medium-sized MFIs – – every 20% or P1.5 Million availment, every 20% or P1.5 Million availment, whichever is higher whichever is higher

Lower qualification conduits – – every 20% or P2.0 Million every 20% or P2.0 Million availment, whichever is higheravailment, whichever is higher

*Validation of at least 20% of the number of sub-borrowers based on the *Validation of at least 20% of the number of sub-borrowers based on the liquidation report submitted by the MFI or 20 sub-borrowers, whichever is liquidation report submitted by the MFI or 20 sub-borrowers, whichever is lower.lower.

Subsequent Loan Release RequirementsSubsequent Loan Release Requirements


3.3. Simple listing of end-borrowers using SBGFCSimple listing of end-borrowers using SBGFC format format

With proof and details of prior disbursements With proof and details of prior disbursements if credit line if credit line is less than P2.0 Millionis less than P2.0 Million

4.4. Other pre-release documents for succeeding availments, as Other pre-release documents for succeeding availments, as required by SBGFCrequired by SBGFC

3.3. Simple listing of end-borrowers using SBGFCSimple listing of end-borrowers using SBGFC format format

With proof and details of prior disbursements With proof and details of prior disbursements if credit line if credit line is less than P2.0 Millionis less than P2.0 Million

4.4. Other pre-release documents for succeeding availments, as Other pre-release documents for succeeding availments, as required by SBGFCrequired by SBGFC

Subsequent Loan Release RequirementsSubsequent Loan Release Requirements

HEAD OFFICE

17th & 18th Floors 139 Corporate Center 139 Valero St. Salcedo Village, Makati CityTel. No. : 751-1888Fax No. : 894-1677 or 8135726Website : www.sbgfc.org.ph

HEAD OFFICE

17th & 18th Floors 139 Corporate Center 139 Valero St. Salcedo Village, Makati CityTel. No. : 751-1888Fax No. : 894-1677 or 8135726Website : www.sbgfc.org.ph

SBC OfficesSBC Offices

LUZON OFFICESLUZON OFFICES

LA UNION DESK OFFICE

La Union Trade CenterCity Hall Complex Quezon Ave. San Fernando City, La UnionTelefax No.: (072) 242-7647

LA UNION DESK OFFICE

La Union Trade CenterCity Hall Complex Quezon Ave. San Fernando City, La UnionTelefax No.: (072) 242-7647

BICOL DESK OFFICE

FEDMACSI Bldg., Panganiban Drive Naga CityTelefax No.: (054) 473-9975

BICOL DESK OFFICE

FEDMACSI Bldg., Panganiban Drive Naga CityTelefax No.: (054) 473-9975

ISABELA DESK OFFICE

Rm. 4 2nd Floor OH Commercial Bldg.San Fermin, Cauayan CityTel. No. : (078) 652-1964

ISABELA DESK OFFICE

Rm. 4 2nd Floor OH Commercial Bldg.San Fermin, Cauayan CityTel. No. : (078) 652-1964

SBC OfficesSBC Offices

TACLOBAN DESK OFFICE

c/o DTI-Region 8 Nacida Bldg.Government Center, PawingPalo, LeyteTelefax No. : (053) 323-8385

TACLOBAN DESK OFFICE

c/o DTI-Region 8 Nacida Bldg.Government Center, PawingPalo, LeyteTelefax No. : (053) 323-8385

ILOILO DESK OFFICE

c/o DTI Region 6 Mezzanine Floor DTI Bldg., JM Basa cor. Peralta St., Iloilo CityTel. No. : (033) 335-0060Fax No. : (033) 335-0083

ILOILO DESK OFFICE

c/o DTI Region 6 Mezzanine Floor DTI Bldg., JM Basa cor. Peralta St., Iloilo CityTel. No. : (033) 335-0060Fax No. : (033) 335-0083

VISAYAS AREA OFFICE

Unit 802-B Keppel CenterAyala, Cebu City Tel. No. : (032) 232 – 1200Fax No. : (032) 234 – 4500

VISAYAS AREA OFFICE

Unit 802-B Keppel CenterAyala, Cebu City Tel. No. : (032) 232 – 1200Fax No. : (032) 234 – 4500

VISAYAS OFFICESVISAYAS OFFICES MINDANAO OFFICESMINDANAO OFFICES

MINDANAO AREA OFFICE

7th Floor Unit 76 Landco Corporate CenterJP Laurel Ave. Bajada, Davao CityTel. No. : (082) 221 – 1488Fax No. : (082) 221 – 0858

MINDANAO AREA OFFICE

7th Floor Unit 76 Landco Corporate CenterJP Laurel Ave. Bajada, Davao CityTel. No. : (082) 221 – 1488Fax No. : (082) 221 – 0858

CAGAYAN DE ORO DESK OFFICE

c/o DTI Region 10Corrales cor. Luna St.Cagayan de Oro CityTel. No. : (088) 231-5703

CAGAYAN DE ORO DESK OFFICE

c/o DTI Region 10Corrales cor. Luna St.Cagayan de Oro CityTel. No. : (088) 231-5703

GENERAL SANTOS DESK OFFICE

c/o DTI-General Santos CityOsmena South St., Gen. Santos CityTel. No. : (083) 552-8385Fax No. : (083) 553-1032

GENERAL SANTOS DESK OFFICE

c/o DTI-General Santos CityOsmena South St., Gen. Santos CityTel. No. : (083) 552-8385Fax No. : (083) 553-1032

Microfinance

gives a poor person

a chance to take

destiny in his hands

and get out of poverty with his efforts.

“… “… the rural micro entrepreneurs the rural micro entrepreneurs

are the are the innovatorsinnovators, the , the risk-risk-

takerstakers, the , the hardworkershardworkers and and

the the heroesheroes..

All that we can do is to improve All that we can do is to improve

their access to the means they their access to the means they

can use to achieve their own can use to achieve their own

ends.” ends.”

– Professor Malcolm Harper

Thank you.Thank you.

SBGFC Micro Finance Program Micro Finance ProgramSBGFC As funded by a US$15Million ODA loan from...

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