Question & AnswerQ&A (DTI DEPARTMENT ADMINISTRATIVE ORDER NO. 12)
The primary purpose of R.A. No. 7882 is to provide assistance to Filipino women in owning, operating, and managing micro and cottage business enterprises.
Micro enterprise refers to any business with total assets of P150,000.00 and below, and cottage enterprise refers to those with total assets above P150,000.00 up to P1,500,000.00, excluding the land on which business facilities are situated.
The key responsible agencies include the Department of Trade and Industry (through the Bureau of Small and Medium Business Development and regional/provincial offices), Government Financial Institutions (Land Bank, Development Bank, Philippine National Bank, Bangko Sentral ng Pilipinas), and the Technical Education and Skills Development Authority (TESDA).
Women entrepreneurs with existing enterprises must have been engaged in business for at least one year with business equipment worth not more than P50,000, and businesses with daily inventory not exceeding P25,000. Beginners must have projects with capitalization below P25,000 and must have undergone training certified by TESDA or other government-accredited institutions.
The maximum loan amount is P50,000 per existing woman borrower but not to exceed the value of her business equipment, and P25,000 for beginner women entrepreneurs.
Eligible projects include manufacturing, processing, service, and trading activities.
Loans to women borrowers require a chattel mortgage on machinery and equipment, whereas NGOs or Primary Organizations need joint and several signatures of principal stockholders.
Penalties include interest penalty charges at 12% per annum on the outstanding balance after at least two quarterly amortizations are overdue, and possible restructuring or declaration of loan due and demandable. Foreclosure may also be initiated for failed projects.
In case of death, the two co-makers are liable for the outstanding balance, or the mortgaged equipment/machinery/tools will be foreclosed as agreed in the chattel mortgage.
Women borrowers must submit registration documents, training certificates, and a business plan; NGOs must comply with standard loan procedures of GFIs. NGOs then validate and evaluate loan applications before approval or disapproval.