RA 7882 Loan Rules for Women Entrepreneurs

Recognizes the role of women in nation building.
Ensures fundamental equality of men and women before the law as stated in the Constitution.

Micro and Cottage Enterprise: Businesses with total assets up to P150,000 (Micro) or between P150,000 and P1,500,000 (Cottage), excluding land.
Loan Fund: 5% of loan portfolios of government financing institutions dedicated to women entrepreneurs.
Prime Rate: Interest rate imposed by government financial institutions to preferred clients.
Government Financial Institutions (GFIs): Includes Philippine National Bank, Land Bank of the Philippines, Development Bank of the Philippines.
Non-Governmental Organizations (NGOs): Non-profit entities supporting socio-economic community development projects.
Primary Organizations: Groups of at least four microenterprise operators working together for common business or resource goals.

Department of Trade and Industry (DTI) through its Bureau of Small and Medium Business Development (BSMBD): Develops and implements MCSME programs.
Regional and Provincial Offices: Implement DTI policies regionally and provincially.
GFIs (Land Bank, DBP, PNB): Provide financing suited to agriculture, industry, and SME development.
Bangko Sentral ng Pilipinas (BSP): Sets monetary, banking, and credit policies.
Technical Education and Skills Development Authority (TESDA): Offers skills training and development.

Loan Purpose: Purchase of equipment, tools, or materials for business activities.
Eligible Borrowers: Women entrepreneurs or NGOs/Primary Organizations on-lending to women.
NGOs must meet requirements including one year of successful lending, registration, management, capital counterpart, and good collection rates.
Women entrepreneurs classified as existing (over 1 year, business assets up to P50,000) or potential (less than 1 year or new, max capitalization P25,000, trained).
Loan Amount: Maximum of P2,000,000 for NGOs; P50,000 for existing women entrepreneurs; P25,000 for beginners.
Interest Rate: Lower of Prime rate or 12% per annum.
Collateral: Chattel mortgage for equipment; joint and several signatures for NGOs.

GFIs follow standard procedures.
Required documents include government registration or training certificate and a business plan.
NGOs validate borrower applications and evaluate worthiness.

Maximum loan maturity of three years including six months grace period.
Repayments may be monthly, quarterly, or semi-annual.
Renewals treated as new applications; only borrowers compliant with payments are eligible.

Six or more missed installments or arrears exceeding 20% lead to loan restructuring or acceleration.
Three written demands required before legal action.
Penalty fees of 12% per annum on overdue balances.
Foreclosure applies for failed projects.

Co-makers liable for outstanding loan balance or foreclosure of equipment mortgage.

Prohibited acts include selling, mortgaging or encumbering loan-financed equipment before full payment.
GFIs cannot unjustifiably refuse or delay loans.

BSMBD formulates rules, accredits training institutions, coordinates program implementation, and promotes the program.
Regional/Provincial offices disseminate information, coordinate monitoring, and submit reports.
GFIs allocate funds, evaluate loan applications, and process loans promptly.
BSP audits GFIs.
TESDA provides training and issues certificates.

GFIs submit loan disbursement and repayment reports to BSMBD.
BSP audits to ensure compliance.
Performance measured by job creation, fund utilization, repayment rates, and overall program impact.

The IRR takes effect 15 days after publication in a newspaper of general circulation.