Program Objectives
- Provide credit assistance preferably to non-farm enterprising poor in areas lacking micro-lending institutions.
- Augment family income and elevate socioeconomic status above marginal levels.
- Enable sustainable income-generating activities through social preparation and capacity building.
- Develop responsible users of formal lending services through technical support.
Program Components
Social Preparation:
- Group sessions focused on self-enhancement, volunteerism, leadership, social responsibility.
- Goals include raising self-awareness, positive work attitude, proper income utilization, and loan repayment responsibility.
Capability Building:
- Skills training in entrepreneurial development, business management, product improvement, bookkeeping, cash flow.
- Gender considerations included.
- Collaboration with LGUs, government, and private agencies.
Credit Assistance:
- Loans between ₱5,000 and ₱50,000 for feasible micro-enterprises.
- Interest rate at 24% per annum (flat rate), modeled after QUEDANCOR.
- Loan terms: up to 1 year for ≤₱20,000 loans; up to 2 years for larger loans.
Savings Mobilization:
- Mandatory savings totaling 20% of loan amount split into capital build-up (10%), emergency fund (7%), and operational fund (3%).
- Promotes enterprise sustainability and crisis support.
Access to Other Support Services:
- Training on accessing additional social services.
- Coordination with NGOs and other providers for community-level networking.
Eligibility and Borrower Requirements
- Must pass Means Test measuring income and assets.
- Located in identified underserved municipalities/barangays.
- Physically fit, interested, and have ongoing income-generating projects.
- Resident of community for at least six months prior and intending to stay two more years.
- Age: 21 minimum; 16-20 with parental consent.
- Willing to comply with rules and accept technical assistance.
- Good community reputation.
Borrower Group Formation and Training
- Participants must form groups of at least 15 members, not related up to first degree.
- Individual loans allowed if a group is not feasible, but a co-maker from a group is required.
- Mandatory three-day training covering project mechanics and business skills.
- Continuous social preparation conducted by DSWD Field Office, LGU social workers, and partners.
Loan Application and Documentation
- Loan applications include: application form, project proposal, loan affordability analysis, amortization schedule, promissory note, and picture.
- Documentation stored at City/Municipal Social Welfare and Development Office.
- Memoranda of Agreement required between DSWD and LGUs, as well as with partners.
Loan Release and Repayment
- Loans released via checks to groups or designated entities.
- Loan utilization checks conducted within 3 days post-release.
- Weekly repayment includes principal, interest, and savings.
- Group acts as loan guarantor; individual savings may be used for loan defaults with restrictions.
- Incentives for on-time payment: interest rebates, larger/longer loans, faster repeat loan processing.
- Penalty charges for late payments to be determined with group consensus.
- Repeat loan eligibility requires 100% loan repayment, sufficient savings, attendance, and continued lack of access to formal credit.
Fund Management and Recovery
- DSWD Field Offices maintain trust accounts, preferably in Land Bank.
- Regional Directors accountable for fund releases; documentation subject to audit.
- Recovery modes:
- Individual level: weekly repayments during group meetings.
- Group/PO level: monthly remittances to DSWD.
- DSWD Field Office to Central Office: quarterly payments.
Monitoring, Reporting, and Evaluation
- Weekly monitoring for first 3 months, then monthly, focusing on policy compliance, meetings, collections, project and borrower status.
- Monthly financial reports and quarterly implementation reports submitted by Field Offices to Central Office.
- Central Office may conduct biannual project monitoring visits.
- Annual overall program evaluation conducted.
Legal and Administrative Provisions
- Program implementation is subject to detailed guidelines including attendance, documentation, and community involvement.
- Effective immediately upon issuance.
- Signed by Secretary of DSWD.