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DBP RESPONSE – MSME Recovery (Wholesale Lending)

Eligible Borrowers

Financial institutions (FIs) which provide credit to start-up or micro, small and medium enterprises (MSMEs) in agri-fishery and non-essential services:

    1. Rural banks
    2. Thrift banks
    3. Microfinance-oriented banks
    4. Non-Bank Financial lnstitutions (i.e. Cooperatives, Microfinance lnstitutions, etc.)

Eligible Sub-borrowers

Any duly registered micro, small and medium enterprises that are engaged in agri-fishery and non-essential services with preference for MSMEs, including start-ups and cooperatives

Eligible Loan Purpose

For working capital requirements (short term or permanent) to finance the operating expense of the business to ensure continued operations.

Eligible Loan Purpose

    • For re-lending to agri-fishery and MSMEs
    • Loan purpose of sub-borrowers must be for working capital/financing of operational expense requirements only

Eligibility Criteria

Must meet the following minimum requirements:

    1. CAMELS rating of at least “3”
    2. Three (3) years track record of profitable operations
    3. Ratio of Past Due Loans or Non-Performing Loans (NPL), whichever is applicable, plus items in litigation to Gross Loan Portfolio is not in excess of the industry average plus 2% for rural banks; or plus 5% for thrift banks, but not to exceed 25% based on the quarterly report of BSP
    4. Positive results on yield cost gapping
    5. Minimum capital prescribed under X111.1 of the MORB, and Capital Adequacy Ratio (CAR) as required under applicable and existing capital adequacy framework
    6. Accredited by the Philippine Guarantee Corporation (Philguarantee) and all sub-loans should be
      guaranteed by Philguarantee (a mandatory requirement if not compliant with any of the items 1-5 above)

In no case shall an Fl with a negative capital position or with capital ratios below the BSP requirement (as applicable) be eligible under this Program.

Credit Facility

Term Loan

Loanable Amount

Based on the Fl’s computed borrowing capacity

Interest Rate

2.5% per annum fixed for three (3) years, provided that the lending rate to the sub-borrowers should be reduced by the equivalent of savings on cost of funds

Grace Period

Maximum of twelve (12) months grace period on principal only

Loan Tenor

Maximum of three (3) years including grace period

Loan Security/Conditions

    1. FIs that cannot comply with the Risk Assessment Acceptance Criteria (RAAC) or pre-qualifying criteria should be guaranteed by Philguarantee. Proceeds shall be endorsed in favor of DBP.
    2. Assignment of sub-PNs at 100% of Principal amount. Custody of sub-PNs shall remain with the borrower. Substitution of fully paid sub-PNs or those that are past due is required.

Mode of Release

Lump sum / Staggered

Standard Fees

Service fees – waived
GRT – for the account of the borrower
DST – for the account of the borrower

Minimum Documentary Requirements

    1. Board Resolution duly signed by the Board of Directors or Board of Trustees (whichever is applicable) or duly notarized Secretary’s Certificate:
      • Authorizing the Fl to borrow funds, negotiate and enter into agreement with the Bank, and designating at least two (2) officers of the Fl {with their respective specimen signatures;
      • Authorizing the designated signatories to sign, endorse loan documents, Deed of Assignments, Notes and other documents pertaining to the loan obtained from DBP;
    2. List of lncumbent Members of the Board of Directors/Trustees and Principal Officers indicating therein their respective educational attainment and work experience as of recent date;
    3. List of existing principal shareholders and their stockholdings (with 10%) or more of total shares;
    4. Audited Financial Statements {FS) (i.e Balance Sheets and lncome Statements) for the past three (3) years and latest interim FS, which should not be more than six (6) months old;
    5. Brief Company Profile;
    6. Articles of lncorporation/Corporation and By-laws including amendments thereto, if any;
    7. Certificate of Registration with Securities and change Commission (SEC) and/or Certificate of Authority to Operate from the BSP (if applicable);
    8. Deed of Assignment;
    9. Copy of year-end and latest quarterly Risk-Based Capital Adequacy Ratio (RBCAR) Report as submitted to BSP; and
    10. Borrower shall execute a Data Privacy Consent Form or Credit lnformation Authority.

Per Loan Availment:

  1. Promissory Note
  2. Disclosure Statement
  3. Notice of Availment
  4. Deed of Undertaking

During Liquidation:

  1. Utilization Report
  2. Supplement to Deed of Assignment

Additional documents may be requested by DBP to facilitate proper evaluation of the borrower’s loan application.

Download Brochure

For inquiries, feel free to contact:

Rallen O. Verdadero
Head
Program Development and Management II Department
(02) 8818-9511 local 3327
roverdadero@dbp.ph

Gracely Lux G. Itum
Program Officer
Program Development and Management II Department
(02) 818-9511 local 2330
glgitum@dbp.ph; pdm2-lpdu@dbp.ph

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