2. K A Y O D (Kabuhian Alang sa Yanong Operators ug Drivers)

3. WHAT IS K A Y O D ? KAYOD Loan product is for micro entrepreneurs engaged in regular transport (motorized trisikad) business activity. It aims to make available affordable credit for these operators and drivers to acquire new, additional or repair motorized trisikad units. It especially seeks to reach operators who currently depend on loans from informal money lenders and other 5-6ers. And for drivers who had long been dependent on units leased from some operators.

4. Offer a loan that is based on a solidarity mode of obligation; To grant a loan that is based on client’s Cash Flow; Implement a loan delivery and collection system that enforces zero tolerance delinquency; Generate Savings K A Y O D OBJECTIVES

5. Client Eligibility Criteria Applicant must be an experienced operator and driver, at least 2 years, and has basic knowledge of motorized tricycle maintenance; Must be willing to join/form a group of 5 borrowers; Must have attended the seminar/orientations and passed training; Must be a permanent resident, at least 2 years, in the locality or within the geographic area served by the bank; Both applicant and co-borrower must have another stable source of income other than the income from the tricycle unit.

6. Criteria for Group composition Composed of five (5) individuals residing within the same Barangay; Each group must be composed of 3 operators and 2 drivers; Group members should personally know each other and must not be relatives particularly; Father and Son, Brothers; Each group members must be willing to guarantee each other’s loan, on solidarity terms, “obligasyon nimo/ninyo, obligasyon ko”; Each group member must be willing to guarantee each other’s loan under joint solidarity terms;

7. Operators and Drivers of motorized trisikad must be physically and mentally fit; Age requirement is 22-50 yrs. Old, preferably male; Applicants must have no negative records and other obligations from other formal or Informal lenders; Must have 2 co-makers, aside from the group, who are duly approved by the CRECOM.

8. Basic Bank Policy Loan AmountPhP21K – PhP65 ARCR30% from the NCIF Term:12 –24 mos. Interest Rate3%/ mo. Saving BuildupPhP3K direct dep. to the bank Service Charge4%/ availment

9. Basic Bank Policy Nature of LoanGroup of solid five members Mode of CollectionDirect Remittance to the bank CollateralChattel Mortgage Group Savings Fund2% from the principal and to be augmented by P10. savings per week

10. Basic Bank Policy Loan Protection Fund.013/annum Penalties2%/week on missed amortiza- tion

11. Performance of the K A Y O D, As of August 31, 2002, Cantilan Branch Amount of loan released Php 1,653,000.00, for 34 units motorized trisikad. Loan account balance as of August 31,2002 Php 986,036.25, for 33 units motorized trisikad. One unit motorized trisikad has been paid- up. Amount collected Php 666,963.75 principal only.

12. Product Performance as of August 31,2002 – Tandag Branch 5 units of Motorized trisikad were released. Total amount released Php 293,000.00 Loan account balance Php 238,598.00 Total amount collected Php 54,402.00 Principal only. Savings Personal Php 18,058.81 Group Fund Php 6,739.54

13. Each group members must be willing to religiously attend their meetings and other pertinent group interaction activities at least once a month; Each member must be willing to commit himself to abide by the provision and agreement (Kasabutan) between the group and the bank; The loan of group members shall be released within the same day;

14. Basically PRODUCT DELIVERY SYSTEM: A) Clients selection; B) Inadequate CI/BI AND CASH FLOW Analysis; C) Poor QUALITY of Units made; More units were being released; PROBLEMS ENCOUNTERED

15. Be sure to do market research first before anything else. Think a million times if the product, especially the policies and features, are really suitable for your target market Pilot Testing is greatly important to see if the product will click and repayment by borrowers easy Consistent implementation of MF Best Practices Adherence to the product manual; Be sure that the units you finance are of good quality; LESSONS LEARNED