Objective of the Program
- Provide credit access for casual government employees to support livelihood projects.
- Augment family income and create employment opportunities for dependents or relatives.
Definitions of Key Terms
- Casual Employee: Passed probation but not regular due to eligibility or capability testing.
- Co-Maker: Regular employee who guarantees repayment if borrower defaults.
- Non-Participating Agency: Government units not formally in the program but whose employees may avail loans individually or as a group.
- Participating Government Agency (PGA): Agencies with formal agreements with QUEDANCOR.
- Participating Government Employees' Association (PGEA): Associations with formal agreements with QUEDANCOR.
- Self-Reliant Team (SRT): Informal groups of employees from same agency promoting business activities.
- Receivables: Monetary benefits accrued to the employee, including salaries and retirement pay.
- State Employee: Permanent or casual employees eligible for loans under the program.
- Team Leader (TL): Elected leader of SRT responsible for loan collection and remittance.
Scope of the Program
- Applies to casual employees in all government branches (executive, legislative, judiciary).
- Includes state universities, local government units, government corporations, and instrumentalities.
Eligibility Requirements
- At least two years government service; six months in current employer if transferred.
- Minimum of 15 days unexpended leave credits.
- No pending criminal or administrative cases.
- Net monthly take-home pay not less than Php 3,000 after deductions and loans.
- Must have regular/permanent co-maker(s) with salary grade equal or higher.
- For lower salaried co-makers, at least two co-makers required.
- No outstanding past due QUEDANCOR loans.
Loan Application Requirements
- Completed application forms.
- Certified copies of valid ID for borrower and co-makers.
- Recent 2x2 photographs of borrower.
- Pay slips for two payroll periods prior to application.
- Additional requirements depending on agency participation, including post-dated checks (PDCs) and group MOAs for SRTs.
Security and Guarantee Arrangements
- Co-makers provide loan security for individual borrowers.
- SRTs execute joint and several signatures (JSS) agreements.
- Regular employees may act as co-maker only once under the program.
Loanable Amount
- Maximum loan equivalent to three months’ basic salary or Php 50,000, whichever is less.
- Team Leaders of SRTs may receive additional loan of up to Php 50,000 for checking account deposits.
- Interest applied to additional loan; repayment within loan term with restrictions on withdrawal.
Loan Terms and Payment
- Payment period up to three years with monthly amortization.
- Interest rate fixed at 14% per annum using straight-line method.
- Interest for first year deducted in advance; subsequent years amortized evenly.
- Service fee of 1-3% based on loan term deducted upfront.
Payment Procedures
- For participating agencies, payments via payroll deductions.
- Non-participating agencies or individuals pay via PDCs.
- Special provisions for SBMA employees.
Pre-Termination Fee
- 3% fee on outstanding principal for early loan pre-termination.
- Exceptions for restructured loans, institutional buyouts, or full payments within 30 days before maturity.
Formation and Functioning of Self-Reliant Teams (SRT)
- Groups of 3 to 15 employees from the same agency.
- Elect a Team Leader to administer collections and payments.
Incentives for Team Leaders
- 1% rebate on total group principal for timely and full loan payments.
- Rebate applies on final amortization payment.
- Legal heirs entitled to rebate in case of death or incapacitation.
- Procedures for replacement of Team Leader if incapacitated.
Loan Processing and Release
- Administrative and Finance Services process applications and release funds.
- Borrowers receive amortization schedules and promissory notes requiring acknowledgment.
Special Provisions
- Program policies apply to existing IAL and SBMA windows unless inconsistent.
- Supplemental MOAs required for existing participating agencies and associations.
- SRT rules apply also to regular employees in non-participating agencies opting into the program.
Effectivity
- Circular became effective upon approval on August 15, 2005, under the authority of QUEDANCOR President and CEO Nelson C. Buenaflor.