Loan Product Features Using 7 Bank Examples

Comparison of Product Features

Client Eligibility Criteria No. of years in operation Licenses Residency Age Bank 1 At least 1 yr Resident of either of 3 specific towns for the last 3 years 25 – 60 Bank 2 Last 2 years Resident of town where branch is located for the last 3 years 21 – 60 Bank 3 At least 1 year Resident of the same barangay for at least 3 years Bank 4 21 – 65 Bank 5 At least 2 years LGU and DTI Resident of the branch area for at least 3 years 18 – 60 and in good health Bank 6 Preferably with LGU and DTI licenses 21 – 65 and in good health Bank 7 LGU license Resident of the same barangay for at least 1 year and must own house and lot 18 -60 and in good health

Client Eligibility Criteria ID Business Location Co-Maker Bank 1 Has some form of ID Within the geographic coverage of MFU Must be willing to get 2 Co-makers Bank 2 Bank 3 Has some form of ID (SSS, GSIS, Driver’s License, Voter’s ID, Business Permit Within priority areas of MFU Bank 4 Bank 5 Bank 6 Bank 7

Client Eligibility Criteria Others Loans Cash Flow Bank 1 Must have no outstanding loan and past due record Prioritize those with daily/weekly sales Bank 2 Business must generate daily/weekly sales Bank 3 Those with outstanding loans may qualify if they don’t have past due record Must pass CI and Cash Flow analysis Bank 4 Bank 5 Those with outstanding loan with 5-6 operators must finish paying their loans before they can qualify to borrow from MFU Bank 6 Preferably without loans from other sources, formal or informal Bank 7 Those with outstanding loans may qualify if their loans are current.

Loan Size Bank 1 Php 3,000.00 Php 25,000.00 Bank 2 Php 60,000.00 Minimum Maximum Bank 1 Php 3,000.00 Php 25,000.00 Bank 2 Php 60,000.00 Bank 3 Php 2,000.00 Php 50,000.00 Bank 4 Php 100,000.00 Bank 5 Bank 6 Php 75,000.00 Bank 7

Interest and Other Charges Service Charge Others Bank 1 3% fixed per month, add-on 3% Processing Fee = P50; Notarial = P50; Insurance Bank 2 3% per month flat 2.5% of loan amount Notarial fee = P100; Insurance = 0.3 -0.7% of loan, depending on loan term; GRT=5% of interest payable Bank 3 2.5% per month flat, add-on 3%, deducted upfront Insurance = 0.4 – 1.3% of loan, depending on loan term Bank 4 3.5% per month flat, add-on 5%, deducted upfront Insurance; Notarial fee = P100; P25 Miscellaneous (e.g cost of forms used) Bank 5 2.5% per month flat 3% of loan proceeds for 3 mos.; 5% for 6-month loan, deducted upfront Insurance = P13/P1000 loan; Notarial fee = P100 Bank 6 2% per month, add-on 2% of loan amount for 2-3 months; 4% for 4-6 months Notarial Fee Bank 7 2.5% per month, add-on 0.83% per month, add-on Insurance; pre-deducted

Penalties for late payment Bank 1 P20/day missed Bank 2 P20/ day missed, or P100/week overdue Bank 3 6% of delayed installment/day, for daily amortizations; 6% of delayed installment/week, for weekly amortizations Bank 4 P5/day, for daily amortizations P5/week, for weekly amortizations Bank 5 P500/missed payment + 5% of the late amortization, if 3 days past due Bank 6 5% of loan amortization Bank 7 100% of the amortization amount of every missed payment

Savings Contribution / Contractual Savings Bank 1 5% of principal upon loan release 10% of each loan amortization; contractual Clients not allowed to withdraw from the savings account until loan is fully paid Bank 2 5% of loan amount upon release Bank 3 Initial deposit of P100 At least 10% of each loan amortization; contractual Bank 4 Bank 5 10% of loan amount, add-on Bank 6 Bank 7 5% of loan amount, add-on

Loan Term Term Bank 1 2 – 6 months Bank 2 1 – 12 months Bank 3

Payment Frequency Term Bank 1 Daily / Weekly Bank 2 Bank 3 Bank 4

Guarantee / Security Term Bank 1 Bank 2 Bank 3 Spouse/relative as co-borrower Two Co-Makers Deed of Assignment of deposit account/Authority to debit Chattel Mortgage (for loans above P15,000.00) Insurance Bank 2 Chattel Mortgage Pledge of deposits Insurance coverage Bank 3 For loans below P25,000.00: Spouse’s signature as co-applicant Deed of Assignment of Deposit Account Security Agreement (in the vernacular) For loans over P25,000.00: Deed of Assignment on deposit account

Guarantee / Security Term Bank 4 For loans below P20,000 Spouse’s signature as co-applicant Two co-makers Deed of assignment of deposit account Security agreement (in the vernacular)   For loans over P20,000 but less than P50,000 Chattel mortgage For loans greater than P50,000 REM

Guarantee / Security Term Bank 5 For P3,000 to P5,000 loans Spouse’s signature as co-borrower Must have one co-maker Insurance coverage   For loans greater than P5,000 but less than P40,000 Security agreement or chattel mortgage on at least one of the following: serialized assets, equipment, vehicle, inventory Deed of assignment of deposit account For loans P40,000 up to P50,000: Hard collateral

Guarantee / Security Term Bank 6 Must have a spouse/relative as co-borrower Two co-makers Insurance coverage Security Agreement Deed of assignment of savings Chattel mortgage, on a case-to-case basis, as determined by top management

Guarantee / Security Term Bank 7 For loans below P5,000 Spouse/relative as co-borrower Two co-makers Security agreement Insurance   For loans over P5,000 but less than P50,000 Security Agreement For loans over P50,000 Hard collateral For loans P40,000 up to P50,000: Hard collateral

Client Incentives Bank 1 Bank 2 Bank 3 Bank 4 Bank 5 Bank 6 Bank 7 Clients with perfect repayment can avail themselves of bigger repeat loans, based on adjusted repayment capacity rate (ARCR) and cash flow, with fast loan release of one day Bank 2 Clients with perfect repayment can avail themselves of bigger repeat loans, based on ARCR and cash flow, with fast loan release of one day. Bank 3 Speedy access to subsequent loans; Larger subsequent loans Bank 4 Bank 5 Based on ARCR and cash flow, a client may get bigger repeat loans and/or longer maturity period, with fast loan release of within 1-3 days. Clients shall be informed that they cannot qualify for a repeat loan if more than 10% of their payments on their current loan are not on time. Bank 6 Clients with perfect repayment can avail themselves of bigger repeat loans, based on ARCR and cash flow. Bank 7

Client Orientation Client Orientation is required by all seven banks

Loan Approval Process Bank 1 Bank 2 Bank 3 Loan application must pass the MF Credit Committee. The Credit Committee meets at least once a week. Bank 2 Loan application must pass MF Credit Committee. The Credit Committee meets at least once a week. Bank 3 Loan application must pass the MF Credit Committee. However, the Credit Committee composed of the branch manager and the MFU staff, is responsible merely for evaluating loan applications for recommendation to the Credit Management Director who has the sole authority to approve or deny loan applications up to P150,000. Credit Committee meets twice a week.

Loan Approval Process Bank 4 Bank 5 Bank 6 Bank 7 Loan application must pass the mini Credit Committee. The Credit Committee, composed of the bank’s VP and Head of Operations, a Board member, and the MFU staff, meets once a week to evaluate applications. Bank 5 Loans are approved by the Credit Committee at the branch level. Bank 6 Loan applications must pass mini Credit Committee. The Credit Committee meets weekly. Bank 7 Loan application must pass the mini Credit Committee. The Credit Committee meets weekly