Micro-Lending Through MSME-Oriented Rural Banks (Micro-Local)

SMALL BUSINESS CORPORATION (Small Business Guarantee and Finance Corporation)
17th & 18th Floors, 139 Corporate Centre, Valero Street Salcedo Village, Makati City

Program Title: MICRO-LENDING THROUGH MSME-ORIENTED RURAL BANKS (MICRO-LOCAL)

micro-lending finance photo — Photo by Sole Treadmill

Target Conduit:
* Rural and Cooperative banks with the following minimum qualifications:
o At least 3 years in existence as a bank; may be on a start-up basis in microfinance
o At least 50 existing microfinance clients; if start-up, should plan for at least 50
o Must have a manpower of at least three exclusively for microfinance operations; if start-up, should plan for at least 3
o Minimum asset size must conform with BSP guidelines
o CAMELS rating of at least 3
o Latest Financial Ratios
– Liquid assets not below 10% of deposits
– Capital Adequacy Ratio of at least 10% (per BSP guidelines)
– Microfinance portfolio-at-risk (PAR) of not more than 10%
– Past due rate not exceeding 15%, preferably at par with industry average
o Borrower Risk Rating of “5” or better per SBC evaluation

Loan Purpose: For re-lending to micro-borrowers

Terms/Requirements:

Loan Amount:
* Minimum of P200 Thousand
* Maximum of P50 Million on the first year
* Maximum of P100 Million for the succeeding years

Line Drawdown:
* Minimum of P100 Thousand
* Maximum of 30% of credit line

Term and Line Expiry:
* One year credit line, subject to renewal

Repayment Term per Drawdown:
* 360 days, payable quarterly; may be up to 2 years, if justified by nature of micro-borrowers’ business as in the case of graduating micros

Interest Rate: Available upon request.

Service Fees: None

Pass-on Rate Incentive:
* MFIs with monthly average end-borrower pass-on rate of 2.5% (1.2% for wholesalers), inclusive of service fees, shall be given an incentive. All fees (evaluation and loan availment processing fees) shall be refunded in favor of the MFI upon its credit line renewal.

Security:
* Continuing Surety Agreement of principals
* Hard collateral may be required if start-up in microfinance

Documentary Requirements:

* Letter of Intent to Borrow
* Notarized Client Information Sheet with 1×1 recent ID picture of each principal stockholders/officer (SBGFC form); for banks, Bio-data of all major stockholders and/or officers as submitted to BSP
* Business registration papers
* Board Resolution to borrow and on authorized signatories with specimen signature/s
* Audited financial statements for the past three years, if applicable, and latest interim financial statements (not more than 6 months old)
* Organizational structure/background information
* Schedule of borrowings including details on terms of payment, collateral cover and credit status
* Certificate of good standing from creditors (if applicable)
* Ageing of loan portfolio
* Schedules of past due, microfinance PAR and loan-loss provisioning

Contact Details:
SB Corporation Head Office
17th Floor, 139 Corporate Centre
Valero St., Salcedo Village, Makati City
Phone No. (632) 751.1888
Fax No.: (632) 894.1677
URL: www.sbgfc.org.ph