Wholesale Microfinance Lending

Following the Mandate of Allied Banking Corporation’s founding Chairman Dr. Lucio C. Tan and its Board of Directors to provide the poor and low income individuals wider access to credit thru microfinance loans and other microfinance services to uplift their economic status thereby providing opportunities for growth, Allied Banking Corporation (ABC) wholesales short and medium term loans to accredited Microfinance Institutions (MFIs). These are Rural Banks (RBs), Thrift Banks (TBs), Cooperative Banks (CRBs), other Financial Institutions (Fis), Non-Government organiztions (NGOs) and Cooperatives (Coops) that implement credit assistance programs thru microfinance lending that can increase the income of the entrepreneurial poor clients/sub-borrowers.

TENOR Short Medium	One Year revolving credit lines via drawdowns 1 year 3 years
INTEREST RATE	Prevailing market rate
CREDIT LINE AMT TO MFIs	Based on evaluation/credit needs
SUB LOANS TO END BORROWERS	Up to Php 150,000.00
COLLATERAL	REM or PNs of sub-borrowers/clients and underlying collaterals and/or others as may be required

ACCREDITATION CRITERIA :

Eligible borrowers are Rural Banks (RBs), Thrift Banks (TBs), Cooperative Banks (CRBs), NGOs, Coops and other Financial Institutions (FIs) duly organized, with at least 3 years of good track record of microfinance lending program for the entrepreneurial poor. To qualify for accreditation, the organization (MFIs) must pass the following financial, institutional, and lending performance criteria:

• Total resources of at least Php 5. 0MM, net worth of at least Php 3.0MM
• For Banks: Not less than 10% Capital-to-Risk Assets ratio after ABC and other creditors.
• For Coops and NGOs: Fund balance/members equity to risk assets (per BSP definition) of at least 10% after ABC and other creditors provided bills payable should not exceed 70% of total liabilities
• Profitable for the last 3 years 

• Duly registered with Securuties and Exchange Commission (for NGOs), Cooperative Development Authority (for Coops) or Bangko Sentral ng Pilipinas (for Rural, Thrift and Cooperative Banks)
• Track record of at least 3 years in sucessful microfinance lending operation of the institution
• Credible and competent Board of Directors
• Presence of full time core management microfinance team
• Presence of a separate microfinance unit for the program with full time staff with basic background on credit and financial management
• Presence of savings mobilization program
• Presence of staff development program
• Presence of MIS, Accounting and Internal Control System
• No major exceptions per most recent audit nor negative credit information/findings 

• Have at least 1,500 existing microfinance borrowers
• Collection rate of at least 85% in all lending programs
• Collection rate of at least 95% for microfinance program
• Past due rate of not more than 20% on overall lending operations for banks; not more than 15% for NGOs and Coops; not more than 10% in ABC program 

ABC’s microfinance lending/credit facilities coursed through MFIs are meant for re-lending to entrepreneurial poor to increase the income of poor households.

Loan sizes for sub-borrowers depend on the project requirements and capacity to pay of the entrepreneurial poor. Those organized in groups and centers starts from Php 3,000.00 gradually increasing per loan cycle to Php 50,000.00. For individual borrowers, loan size may range from Php 10,000.00 to Php 50,000.00.

Types of projects to be funded by the MFIs depend upon the needs and capacity of the entrepreneurial poor (clients/sub-borrowers). The sub-borrower/client shall determine what type of project or business to be undertaken with the program partner advising her in determining the viability of the project. However, the following guidelines must be followed in determining the type of project business of the clients/sub-borrowers:

• Viable and has a ready and captured market for the project or service
• Within the capacity of the clients/sub-borrowers to manage
• Able to produce income for the clients/sub-borrowers on a daily, weekly, or monthly cash flows
• Able to generate savings for the clients/sub-borrowers 

Potential program partners/conduits should furnish the following:

• Information on the organization including plans and programs
• Securities and Exchange Commission certificate of registration on Articles of Incorporation and By-Laws
• Information sheet on the members of the Board of Directors and principal officers
• Audited financial statements for the past 3 years
• Aging of microfinance lending program
• BSP’s lastest audit report and CAMELS rating
• Credit application form
• Duly Notarized Board Resolution authorizing the Borrowing and the officer(s) to sign the loan applications and other loan documents
• Other pertinent documents that may be requested by ABC 

Send information directly to:

ALLIED BANKING CORPORATION RBG-MICROFINANCE DEPARTMENT 5th Floor Allied Bank Center 6754 Ayala Ave., cor. Legaspi St. Makati City, Philippines