QuestionsQuestions (QUEDANCOR MEMORANDUM CIRCULAR NO. 366)
It aims to strengthen and standardize QUEDANCOR’s loan security requirements to ensure good loan repayment and improve collection performance, while also supporting steady management of loan receivables and borrowed funds.
It covers all QUEDANCOR borrowers under its various financing programs, except those specifically excluded in the Circular (e.g., IAL Program for Government Employees; NCB Card Program; Inventory Financing Programs; and other programs with existing MOAs that already set collateral/security requirements).
Examples include: (1) IAL Program for Government Employees, (2) NCB Card Program, (3) Inventory Financing Programs; and also other programs with existing Memorandum of Agreement regarding source of funds/co-program implementors and pre-arranged collateral/security provisions (e.g., Dairy Program, CDA-CLP Program, Livecor Agri-Aqua Equipment Leasing Program, Palay Warehouse Receipt Program).
For SRT loans up to PHP 50,000.00: (1) Joint and Several Signatures (JSS) of members of the SRT group; and (2) a Deed of Assignment of Receivables supported by a Marketing Contract/Agreement, if applicable.
For SRT loans above PHP 50,000.00: (1) JSS of SRT group members; (2) Deed of Assignment of Receivables supported by a Marketing Contract/Agreement, if applicable; and (3) a loan guarantee from the participating LGU or Buyer-Firm/IS.
For individual loans up to PHP 50,000.00: (1) Continuing Deed of Assignment of Stocks-in-Trade with Trust Receipt Agreement (for Food/Market Retailers/Sari-Sari Stores) or Deed of Assignment of Receivables supported by a Marketing Contract/Agreement, if applicable; and (2) Co-maker/s.
For loans above PHP 50,000.00: (1) at least 80% REM or at least 80% combination of REM, Non-Interest Bearing Cash Trust Fund, bank/time deposits, LandBank/Government Bonds/Securities and similar investments; and (2) Deed of Assignment of Receivables supported by a Marketing Contract/Agreement, if applicable.
Individual borrowers must have an equity equivalent to at least 20% of the total project cost. The equity may be in the form of agri-fishery machinery and equipment, inputs, or labor.
Borrowers (except LGU, National Government Agencies, and Government-Owned and Controlled Corporations) must issue post-dated checks (PDCs) to cover all loan amortizations.
Borrowers (for corporations, cooperatives, federations, associations, and other entities with juridical personality) must execute JSS of officers or authorized representative/s (as stated in the Circular) and issue PDCs as required.
REM is valued at 100% of the appraisal value.
Cash/Time Deposits/Government Securities are valued at 100% of cash value.
Accounts receivables are valued at 70% of outstanding principal, while inventories/stocks-in-trade are valued at 70% of cash value.
It is valued at 70% of the free/alienable percentage of the gross revenue.
Non-blue chips are valued at 70% of current/face value; blue chips are valued at 80%.
For loans up to PHP 50,000.00: 100% of the loan must be covered by GCLI (for both SRT and individual). For loans above PHP 50,000.00: SRT borrowers and certain individual borrowers (farmers, fisherfolk, workers, sole proprietors/partners, and designated officers/representatives/stockholders signing for juridical entities) must secure GCLI for the unsecured portion, except LGU.
The unsecured portion is that portion of the loan not covered by specified securities, including REM, non-interest bearing cash trust fund, deed of assignment of liquid risk-free assets, deed of assignment of acceptable shares/bonds/investments, deed of assignment of receivables (for special programs), deed of assignment of stocks-in-trade/inventories (for certain retailers), and other related securities.
It supersedes Memorandum Circular No. 321 issued on September 1, 2004. It applies to loan applications filed and received by QUEDANCOR starting July 1, 2005.