Revised Credit Policies (Series 2007)

RATIONALE

To generate sufficient funds from the members in order to meet the short and long term capital requirements of the cooperative and to guide the administration of savings, capital and loan operations.

WHO MAY AVAIL OF THESE LOANS

Regular members are qualified to borrow if they have paid at least ten (10) share capital equivalent to P5,000.00 and membership fee of P1,000.00 and are considered Members in Good Standing (MIGS).

LOAN LIMIT

  1. Emergency / Petty Cash / Grocery / Rice Loans – the maximum amount for petty cash loan for a regular member is set at P15,000.00 payable in twelve (12) months, P12,000.00 payable in twelve (12) months, P10,000.00 payable in twelve (12) or ten (10) months, P8,000.00 payable in eight (8) months, P5,000.00 payable in five (5) months, and P1,000.00 payable in one (1) month to two (2) months at an interest rate of 1% per month - (rice loan).
  2. Purchase Order Slip (POS) – the amount to be granted depends upon the net take home pay
    of the borrower at 1% per month.
  3. Calamity Loan – the maximum is set at P25,000.00 payable in two (2) years at 10% per
    annum.
  4. Alternative Multi-Purpose Loan (AMPL) – maximum of P15,000.00 payable in three (3) years with a net take home pay of P1,500.00 after deducting the monthly amortization.
  5. Regular Loan – The maximum loanable amount is set at P300,000.00 or twelve (12) months salary, whichever is lower, payable for a maximum of six (6) years at an interest rate of 10% per annum, depending upon the capacity of the borrower to pay and submission of the required documents. (Additional factors in the computation of the loanable amount are the money value of leave credits, paid-in share capital and investments, if any.
  6. Consolidated Loan (Conso Loan) - The maximum loanable amount is set at P500,000.00 or twenty four (24) months salary, whichever is lower, payable for a maximum of eight (8) years at an interest rate of 10% per annum, depending upon the capacity of the borrower to pay and submission of the required documents. Any member who availed of conso loan can only be granted a new loan after paying 25% of the existing loan. ( Additional factors in the computation of the loanable amount are the money value of leave credits, paid-in share capital and investments, if any)
  7. Appliance Loan – the maximum loanable amount is set at P100,000.00 payable for a maximum of three (3) years at an interest rate of 10% per annum depending upon the capacity of the borrower to pay and payment shall be undertaken by management directly to the supplier.
  8. Medical Loan – the amount of loan to be granted will depend on the severity of the case of the patient and the paying capacity of the borrower. The maximum loanable amount is P150,000.00 with an interest rate of 10% per annum and payable for a maximum of three ( 3) years.
  9. Housing / Lot Purchase / Car / Business / Hold Out / Buy Out Loan –
    • For Housing/Lot Purchase - the basis for the computation of the loanable amount is computed at twenty four (24) months basic salary plus allowances plus paid-in capital share and investments. The maximum loanable amount is P 1,000,000.00 payable for a maximum of twenty (20) years at an interest rate of 10% per annum, depending upon the capacity of the borrower to pay.
    • For house construction - the amount granted shall be given in trances depending upon the amount of loan and subject to ocular inspection.
    • For Car & Business Loan - the basis for the computation of the loanable amount is computed at twenty four (24) months basic salary plus allowances plus paid-in capital share and investments. The maximum amount is P1,000,000.00 payable for a maximum of ten (10) years at an interest rate of 10% per annum, depending upon the capacity of the borrower to pay.
    • For Hold Out Loan – the maximum amount shall not be higher than 80% of the total time deposits/paid–in share capital with an interest rate of 10% per annum. The amortization period shall depend upon the capacity to pay of the borrower.
    • For loan/s outside GLEDCO (Buy Out Loan), payments shall be undertaken by the management and credit committee. The maximum period of amortization is set at eight (8) years depending upon the capacity to pay of the borrower
    • For collateralized loan - the maximum amount shall not be higher than 80% of the appraised value of the property as determined by Appraisal Committee of GLEDCO depending upon the capacity to pay of the borrower.
  10. Travel Loan: The loanable amount ranges from P20,000.00 to P100,000.00, payable for a maximum of three (3) years.
    • Local Travel - minimum of P 20,000.00
    • Foreign Travel - maximum of P100,000.00

INTEREST, CHARGES AND PENALTIES

  • Interest: Zero (0) interest deduction upon release except in petty cash loan
  • Charges: The cooperative shall collect a service fee of 2.5% of the loanable amount and filing fee of P50.00 to P200.00 depending upon the amount of approved loan. A minimum amount of P250.00 equivalent to 1/2 share shall be deducted as loan retention depending upon the loan amount approved.
  • Penalties: Loans, which remain unpaid after its maturity date shall be considered default. All defaulting loans shall be charged a penalty of 1.5 % interest per month on the amount in default.

RENEWAL OF LOAN

  1. Loans, at least 25% of which have been paid, may be renewed.
  2. All outstanding loan shall be deducted from the new loan in case of re-loan.

SECURITY OF LOAN

  1. Automatically, a member pledges his fixed deposit (share capital) salary and other benefits to secure his loan.
  2. He/she is required to have a solvent co-maker, at least equivalent to his/her current position/salary grade or two (2) members that can satisfy the salary requirement.
  3. The money value of the leave credits plus paid-in share capital plus investments, if any shall be considered in determination of the loan amount to be granted. If not sufficient a collateral is required.

    For petty cash loan, a co-maker is not required except for the P10,000.00 to P15,000.00 subject to the following conditions:

      1. Borrower has sufficient leave credits;
      2. Borrower has the capacity to pay.

REQUIREMENTS:

  1. Certification of net take home pay;
  2. Certification of leave credits.
  3. Signature of spouse ( housing/lot purchase)
  4. Collateral (to be assessed by the Appraisal Committee)
  5. Deed of undertaking
  6. Must not have reached retirement age and insurable

For elected officials, co-terminous, contractual and casual employees ,their amortization will coincide with their term of office.

Additional Requirements:

MEDICAL LOAN:

  1. Doctor’s Recommendation (in case of elective/scheduled surgery);
  2. Medical certificate duly signed by the attending physician;
  3. Official Receipts of all expenses

HOUSING / LOT PURCHASE / CAR / BUSINESS / HOLD OU T / BUY OUT / TRAVEL LOAN:

HOUSING / LOT PURCHASE

  1. Certificate of no pending administrative and criminal case
  2. Latest declaration of Real property and certificate of non-delinquency
  3. Certified photo copy of the original title and/or Special Power of Attorney (SPA) from the owner if not registered in the name of the borrower
  4. Floor and buildings plans, specifications, bill of materials and labor construction cost estimates
  5. Building permit
  6. Deed of Sale

CAR LOAN:

  1. Certificate of no pending administrative and criminal case
  2. Certificate of Registration
  3. Official Receipt / Sales Invoice
  4. Deed of Sale

BUSINESS LOAN:

  1. Certificate of no pending administrative and criminal case
  2. Business Permit
  3. DTI permit
  4. Feasibility study (if new)
  5. Financial Statement (if renewal)
  6. The borrower shall issue twelve (12) months post dated checks covering payment of principal and interest.

HOLD OUT LOAN:

  1. Surrender original copy of certificate/s of time deposits or share capital certificate/s.
  2. Deed of undertaking

BUY-OUT LOAN:

  1. Statement of accounts

TRAVEL LOAN:

  1. Local Travel – itinerary of travel, bus tickets; OR of gasoline consumption
  2. Foreign Travel – xerox copy of duly stamped passport and plane tickets

LOAN REPAYMENT

Loan repayments are made every payroll as follows:

  • Petty Cash Loan – A petty cash loan of P15,000.00 is to be repaid within a period of twelve (12) months, P10,000.00 is to be repaid within a period of twelve (12) or ten (10) months, P8,000.00 to be repaid for eight (8) months, P5,000.00 to be repaid in five (5) months;
  • Rice Loan - a rice loan of P1,000.00 is to be repaid within a period of one (1) month to two (2) months.
  • Regular Loan - is to be repaid with a maximum of six (6) years.
  • CONSOLIDATED LOAN (Conso Loan) – is to be repaid with a maximum of eight (8) years, all loans are consolidated into one.
  • Appliance Loan - is to be repaid with a maximum of three (3) years
  • Medical Loan – is to be repaid with a maximum of three (3)years
  • Housing/Lot Purchase - is to be repaid with a maximum of twenty (20) years.
  • Car & Business Loan – is to be repaid with a maximum of ten (10) years
  • Buy Out & Hold Out Loan - is to be repaid with a maximum of eight (8) years
  • Travel Loan – is to be repaid with a maximum of three (3) years.

SUBSCRIBED PAID IN CAPITAL SHARE REQUIREMENT:

  • (ten) 10 shares equivalent to P5,000.00 (new applicant)
  • minimum of twenty (20) shares equivalent to P10,000.00
  • P 50,000. 00 - P 99,000.00 - 100 shares (P50,000.00) -paid-in 20 shares (P 10,000.00)
  • 100,000.00 124,000.00 - 150 shares (P75,000.00) -paid-in 25 shares (P 12,500.00)
  • 125,000.00 - 174,000.00 - 200 shares (P100,000.00) -paid in 30 shares (P 15,000.00)
  • 175,000.00 - 399,000.00 - 300 shares (P150,000.00) -paid-in 50 shares (P 25,000.00)
  • 400,000.00 - 799,000.00 - 750 shares (P375,000.00) -paid-in 100 shares (P50,000.00)
  • 800,000.00 - 1,000,000.00 -1000 shares (P500,000.00) -paid in 200 shares (P100,000.00)

NOTE: Continuous deduction of share capital until full payment of the subscribed share capital requirement.

APPROVING AUTHORITY

  • Petty Cash - Manager & Credit Committee
  • Appliance/ Regular/ - P100,000.00 & below – CreCom Chairman & Consolidated/ Travel Loan Manager
  • Regular/ Consolidated/ - above P100,000.00 – CreCom Chairman, Manager, Lot Purchase/ Car/ Business/ & BOD Chairman
    Hold Out/ Buy Out/ Medical Loan

In case where the Chairman of the Board, Board of Directors, Manager Credit Committee members and Management Staff will apply for loan, the loan application will be approved by the following officers:

Borrower/Applicant Approving Officer(s)
Chairman CreCom Chairman, Mgr. & 2 Board of Directors
Board of Directors CreCom Chairman, Mgr. & Chairman of the Board
Credit Committee Manager & Chairman of the Board
Manager/Management Staff CreCom Chairman & Chairman of the Board

The decision of the approving officers shall be final except when beyond credit policies, in which case, the member/borrower may appeal to the board of directors.

RELEASE OF LOAN

Loans shall be released to the borrower(s) on a first come first serve basis, except for emergency loans which should be released within 24 hours upon filing of the application subject to the availability of funds. A borrower-member may be given the priority to avail a loan if she/he could present an investor.

ON DEFAULT

The procedures regarding default in payment of loans are as follows:

  1. First default – Oral/written reminder from the Credit Committee;
  2. Second default – Written reminder from the General Manager to the Maker and Co-Maker;
  3. Third default – Written demand from the Legal Counsel;
  4. Fourth default – Whatever action the Board may decide.
Category: Loans

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Government of Laoag Employees Development Cooperative (GLEDCO)

Barangay 10 San Jose, City Hall, Laoag City 2900, Philippines