The MFI Employees Loan Facility is PCFC’s specified lending window which shall be used to finance the MFI’s loan program for its employees. It serves as an incentive to the employees’ countless efforts and full commitment in bringing microfinance services to the poor, thus contributing to the government’s efforts in poverty alleviation.

GENERAL POLICY GUIDELINES

PCFC to MFI

Type of Credit Facility	One year revolving credit line for relending to MFI staff.
Eligible Borrowers	Accredited MFI partners.
Loan Purpose	To finance the MFI’s loan program for its employees.
Loan Amount	Based on credit needs of MFI staff at 85% of value of sub-PN as indicated in the MFI Employees Credjt Availment Plan (MECAP).
Loan Maturity	Up to 3 years PN.
Mode of payment	Quarterly.
Interest and Service Charge	11% interest per yr plus 1 % service fee for up to 1 yr PNs; 12 % interest per yr plus 1 % service fee for > 1 yr PNs.
Manner of Availment	Reimbursement basis (i.e. drawdown against actual loan releases to staff).
Security Requirement	Post Dated Cheques, Deed of Assignment of sub PNs and all underlying collaterals.

MFI to BORROWER

Eligible Borrowers	MFI employees (priority to microfinance program staff)
Loan Purpose	Multi-purpose loan e.g. livelihood, salary loan, educational, emergency, appliance loan, house repair, hospitalization, etc.
Loan Amount	Based on net-take-home-pay of staff and/or household cashflow but not to exceed P50,000 per employee in accordance with MFI guidelines.
Loan Maturity	Based on MFI’s credit policies and guidelines but not to exceed 3 years.
Mode of payment	Payroll deduction every 15 days.
Interest and Service Charge	Based on MFI’s credit policies and guidelines.
Manner of Availment	Based on MFI’s credit policies and guidelines.
Suggestion	Liquidation basis (drawdown based on projected needs).
Security Requirement	Against staff salary and benefits and other security requirements of the MFI.

BASIC IMPLEMENTING GUIDELINES

• MFI partners can use their existing available credit line. If fully utilized, the MFI may request for additional amount subject to the usual evaluation and approving process.
• For CFPs due for renewal, the credit requirements for the loan program shall be considered and included in the amount of credit facility for renewal.
• For all MFIs, the line for this facility shall be equivalent to not more than 50% of investment credit facility or P20Mn whichever is lower.
• On case to case basis, MFIs with a fully utilized P250Mn credit facility may request for additional amount not exceeding P20Mn for this proposed facility or a maximum total facility of P270Mn subject to the usual evaluation and approving process.
• The MFI shall submit MECAP as supporting document to the CFP.
• Loan releases for microfinance staff shall be reported in a separate SOE and separate caption in the PSR.