Coop loan guidelines

Coop loan guidelines

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  IRR-Doc. No. 002-2014 19thof December 2014 L.I.P.A.D MULTI-PURPOSE COOPERATIVE Loan Application Guidelines OBJECTIVE: This document provides guidelines governing CREDIT POLICIES of the LIPAD Multi-Purpose Cooperative drawn from CDA Regulations, pertinent provisions of its By-laws, and procedures approved by the Board of Directors for the orderly implementation of Coop programs and services. I. ELLIGIBILITY: Since the Coop aims to provide benefits to its members, its credit programs are specifically designed to address its members' needs. However, in order to safeguard its resources, only members of good standing can avail of the credit services of the Cooperative. To be members of good standing, they have to meet the following requirements: 1. The borrower has to be a bona-fide member of the Coop. 2. Minimum paid-up Share Capital Requirement shall be based on type of Loan. 3. The borrower has no default on any outstanding loan to the Coop. 4. Must be an Active member. II. CO-MAKER: The Co-maker/Guarantor must also possess the minimum qualifications of a legitimate borrower. The Comaker/Guarantor must understand that by agreeing and signing to Loan Applications and promissory Notes, they lawfully commit themselves to conditionally answer for the payment of the Borrower's obligation when due and demandable. Co-makers are waived in the initial implementation as requested and awaiting due notice. III. LOAN SUPERVISION: The Credit Committee has General Supervision over all loans within the Cooperative. In the evaluation of all Loan Applications, the Credit Committee and Loan Officers/Staff must satisfy themselves that every loan promises to be of benefit to the Borrower. However, it is also their duty to see to it that the Fund of the Cooperative is protected by inquiring carefully into the character and determining the capacity and financial condition of the Borrower and Co-maker. The Credit Committee and Loan Officers/Staff shall exercise utmost care in the appraisal of securities and collaterals offered. The Credit Committee shall decide within seven (7) working days from date of submission of complete requirements upon the loan’s approval. IV. TYPES OF LOANS: PRODUCTIVE LOANS – for the purpose of generating income/business and/or creating opportunity for employment. PROVIDENT LOANS – those not primarily intended to generate income but for the purpose of providing financial relief to the Borrower and his/her family. SPECIAL LOANS – other loans offered by the Cooperative, usually above the loan ceiling of a regular loan. (Gadget, cars, housing etc) The initial Loan offering available from the LIPADMPC as of this date are the PROVIDENT CASH LOANS. Under such loan are the Petty Cash Loan and Short-term Loan. A. PRODUCTIVE LOANS -this section is intentionally left blank.A. PROVIDENT LOANS a. Petty Cash Loans: Mini-loans not over TWO THOUSAND PESOS (P2, 000.00) Loanable Amount: Minimum of P500 and a maximum of P2, 000. Terms of Payment: Maximum of 15 days. Interest Rate: Zero Interest. Fixed interest 2.5% per month if due after 15 days. Service Charge: Fifty (50) Pesos Retentions: 0% Eligibility for renewal: No renewal. Requirements: 1. Paid-up capital of at least FIVE HUNDRED PESOS (P500) 2. Duly filled-up and approved Loan Application Form (with co-borrower). b. Multi-purpose Loans . Loanable Amount: Up to Ninety Percent (90%) of Paid-up Share Capital but not to exceed thousand (20, 000) Pesos. Terms of Payment: Minimum of one month and a maximum of six months. Interest Rate: Fixed interest 2.5% per month deducted from loan. Service Charge: ONE HUNDRED (100) PESOS. Retentions: 0% Eligibility for renewal: 50% of Loan paid. Requirements: 1. Paid-up capital of at least TWO THOUSAND PESOS (P2, 000) 2. Duly filled-up and approved Loan Application Form (with co-borrower). Twenty B. SPECIAL LOANS Page 1 a. Rice Loan: intended for rice only. Terms of Payment: Maximum of one month per TWENTY-FIVE (25) kilos. Service Charge: To be determined by management team. (Price of rice provided by the Coop shall be properly and clearly notified and posted. There are no re-structures with this loan. b. Other Cooperative Products Loan: intended for any products resulting from the projects of the Cooperative. Terms of Payment: Terms of payment shall be provided by the Credit Committee/staff depending on the specific product.
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  IRR-Doc. No. 002-2014 19thof December 2014 V. LOAN RETENTIONS: Loan Retentions are percentage of the Applied Loan Amount to be deducted from the Loan Proceeds and serves as additional investment of the member. As of the moment, Loan Retentions are not applied to any loans of the Cooperative. VI. MODE OF PAYMENT: Petty Cash Loans/Short-term Loans: Voluntary payment of member to Credit Staff/Treasurer. Other Loans: -Intentionally left blank.VII. LOAN RELIEFS: The Cooperative aims to provide members a sense of ownership and thus present members reliefs from loans in specific circumstances. A. Grace period: a grace period of FIVE (5) days after date of due shall be given to members. B. Extension of Loan Payment: A repayment period of the loan may be extended thru a written request of the Borrower to the Credit Committee in order to reduce the amount of monthly/semi-monthly amortization. C. Deferment – a member borrower may submit a letter request to the Credit Committee for the deferment of his/her monthly amortization, however, the reasons must be valid and acceptable. Such deferment must not exceed for more than THREE (3) months in the entire loan period and provided that the interest on the loan for the period of deferment shall be paid by the borrower. D. Loan Restructure/Renewal: a Borrower may avail a refinancing of his/her loan after if at least FIFTY PERCENT (50%) of the original amount has been paid. E. Loan Moratorium: The majority vote of the Board of Directors with the recommendation from the Credit Committee may issue a Loan Moratorium to members who are in total Financial Impairment due to loss of income, financial incapacity and other drastic reasons. Provided, that the Borrower submit a written request to the Credit Committee. Interests and penalties may be lifted from the loan with the discretion of the Board of Directors. VIII. PENALTIES: Loans shall be considered default after FIVE (5) days upon payment maturity. A written demand shall be sent to the Borrower and Co-maker at the date of default. The Borrower or Co-borrower may opt to settle the account without penalties within SEVEN (7) working days upon default. Loans are subject to penalty after SEVEN (7) working days upon default date. Petty Cash/Short Term Loans: Late Payment: ONE PERCENT (1%) of amount due per month compounded monthly. For Default Accounts: SIX PERCENT (6%) of total amount due compounded monthly. IX. APPLICATION PROCEDURES: The following are the Application Procedures for members securing a loan: 1. Fill-up Application form and submit to Credit Committee or Loan Officer. 2. Loan Officer receives the loan and submits it to Credit Committee. 3. Credit Committee checks for loan and payment standing, (coordinates with the Treasurer if necessary) and background checks the applicant. 4. Credit Committee approves loan, affixes signature on application form and submits to treasurer for processing. 5. Treasurer releases funds in means necessary and if available to the Loan Department. 6. Applicant to verify loan status regularly with the Loan Department. If the application is approved and available, the corresponding Loan Officer releases Loan proceeds. The process of approval and releasing must not exceed SEVEN (7) working days unless funds are not available. In that case, the applicant shall be duly notified and scheduled if deemed necessary. X. OTHER PROVISIONS: These set of guidelines/policies are set forth by the Cooperative for the purpose of effectively providing Quality and competitive Loan Services to members. Any changes to the above guidelines shall be publicly announced and posted. Approved this 19th day of January, 2014 at Pulo, City of Cabuyao, Laguna, Philippines. ____________________ Jay de jorge Board Chairperson Angelo James Furto Page 2 Eldina Navea Andres Aragon Jeniffer Zaporteza Jinalyn Paat Rodan Belesario