1. SBGFC Micro Finance Program Micro Finance ProgramSBGFC As funded by a US$15Million ODA loan from International Fund for Agricultural Development (IFAD) As funded by a US$15Million ODA loan from International Fund for Agricultural Development (IFAD)

2. Our Objective Reducing poverty through Micro Finance. Micro Finance Program

3. The SBGFC Micro Finance Program The SBGFC Micro Finance Program Lending guidelines is differentiated based on the category or nature of operation of the conduit. Large, focused, well established MFIs shall be allowed higher loan limits relative to young, small micro-finance providers. Eligibility criteria for large conduits is stricter, but has wider incentives in terms of loan terms including pricing. Lending guidelines is differentiated based on the category or nature of operation of the conduit. Large, focused, well established MFIs shall be allowed higher loan limits relative to young, small micro-finance providers. Eligibility criteria for large conduits is stricter, but has wider incentives in terms of loan terms including pricing.

4. The SBGFC Micro Finance Program The SBGFC Micro Finance Program Participation by small conduits in the poorest provinces, as identified by IFAD thru its Rural Micro Enterprise Promotion Program (RuMEPP), shall be allowed through a relaxation of the eligibility criteria. SBGFC will assist small conduits in their capability-building requirements thru the technical assistance component of the IFAD loan. Participation by small conduits in the poorest provinces, as identified by IFAD thru its Rural Micro Enterprise Promotion Program (RuMEPP), shall be allowed through a relaxation of the eligibility criteria. SBGFC will assist small conduits in their capability-building requirements thru the technical assistance component of the IFAD loan.

5. The SBGFC Micro Finance Program The SBGFC Micro Finance Program pre-enterprise micros Target end-borrowers are pre-enterprise micros, which are either: Start-up micro entrepreneurs Not registered With no or limited credit and livelihood track record No tangible business assets Graduating micro entrepreneurs Willing to register as an enterprise Have a livelihood track record of at least one year Have a credit track record with an MFI With some tangible business assets Start-up micro entrepreneurs Not registered With no or limited credit and livelihood track record No tangible business assets Graduating micro entrepreneurs Willing to register as an enterprise Have a livelihood track record of at least one year Have a credit track record with an MFI With some tangible business assets

6. Micro Finance Facilities MICRO-LEAD Lending through Lead Microfinance Institutions MICRO-LOCAL Lending through MSME Rural Banks MICRO-LEAP Lending through Small Microfinance Providers Micro Finance Facilities MICRO-LEAD Lending through Lead Microfinance Institutions MICRO-LOCAL Lending through MSME Rural Banks MICRO-LEAP Lending through Small Microfinance Providers The SBGFC Micro Finance Facilities The SBGFC Micro Finance Facilities

7. MICRO-LEADMICRO-LEAD Lending thru lead micro finance institutions whose lending portfolio and organizational structure are predominantly or at least 60% micro finance.

8. Micro Finance Facility- MICRO-LEAD MICRO-LEAD Target Conduits Medium and large microfinance institutions (MFIs) Purpose of Loan Retail re-lending to micro borrowers Wholesale re-lending to MFIs Retail re-lending to micro borrowers Wholesale re-lending to MFIs

9. Micro Finance Facility- MICRO-LEAD MICRO-LEAD Loan Amount Medium MFIs - Minimum of P3 Million - Maximum of P50 Million on the first year - Maximum of P100 Million on succeeding years Large MFIs - Minimum of P15 Million - Maximum of P100 Million on the first year - Maximum of P200 Million on succeeding years Medium MFIs - Minimum of P3 Million - Maximum of P50 Million on the first year - Maximum of P100 Million on succeeding years Large MFIs - Minimum of P15 Million - Maximum of P100 Million on the first year - Maximum of P200 Million on succeeding years Line Drawdown Minimum of 5%, up to 20% of credit line per drawdown

10. Micro Finance Facility- MICRO-LEAD MICRO-LEAD Term and Line Expiry One year credit line, subject to renewal One year only; may be up to 2 years, but only if justified by nature of micro-borrowers business as in the case of graduating micros One year credit line, subject to renewal One year only; may be up to 2 years, but only if justified by nature of micro-borrowers business as in the case of graduating micros Repayment Term per Drawdown 360 days, payable quarterly Security Continuing Surety Agreement on principals

11. Micro Finance Facility- MICRO-LEAD MICRO-LEAD Minimum Qualifications of MFI-Borrower EligibilityCriteria Medium-sized MFIs Large-sizedMFIs Years in microfinanceAt least 3At least 10 No. of borrowersAt least 3,000; at least 10 conduits, if wholesaler At least 20,000; at least 20 conduits, if wholesaler ManpowerAt least 20; at least 10, if wholesaler At least 100; at least 20, if wholesaler Microfinance portfolioAt least 60%

12. Micro Finance Facility- MICRO-LEAD MICRO-LEAD Minimum Qualifications of MFI-Borrower FinancialRatios Medium-sized MFIs Large-sizedMFIs Current Ratio1.2; 1.0, if bank 1.2; 1.0, if bank Capital Adequacy Ratio At least 20% (10% if bank, per BSP guidelines) Microfinance Portfolio at Risk (PAR)* Not more than 10% Not more than 8% MFIs in the RuMEPP priority provinces that do not pass the PAR requirement may still be considered for accreditation if they have a CAR of not less than 20% and a PDR of not more than 10%

13. MICRO-LOCALMICRO-LOCAL Micro lending thru MSME-oriented rural and cooperative banks.

14. Micro Finance Facility- MICRO-LOCAL MICRO-LOCAL Target Conduits Rural Banks -may be start up in micro finance Cooperative Banks Rural Banks -may be start up in micro finance Cooperative Banks Purpose of Loan Retail re-lending to micro borrowers

15. Micro Finance Facility- MICRO-LOCAL MICRO-LOCAL Loan Amount Minimum of P200 Thousand Maximum of P50 Million on the first year Maximum of P100 Million on the succeeding years Minimum of P200 Thousand Maximum of P50 Million on the first year Maximum of P100 Million on the succeeding years Line Drawdown Minimum of P100 Thousand Maximum of 20% of credit line Minimum of P100 Thousand Maximum of 20% of credit line

16. Micro Finance Facility- MICRO-LOCAL MICRO-LOCAL Term and Line Expiry One year credit line, subject to renewal One year only; may be up to 2 years, but only if justified by nature of micro-borrowers business as in the case of graduating micros One year credit line, subject to renewal One year only; may be up to 2 years, but only if justified by nature of micro-borrowers business as in the case of graduating micros Repayment Term per Drawdown 360 days, payable quarterly Security Continuing Surety Agreement on principals (must) Hard collateral may be required if start up in microfinance Continuing Surety Agreement on principals (must) Hard collateral may be required if start up in microfinance

17. Micro Finance Facility- MICRO-LOCAL MICRO-LOCAL Minimum Qualification of MFI-Borrower 1.Track record - at least 3 years as a bank; may be on start up basis in microfinance 2.Microfinance clients - At least 50; if start up, must plan for at least 50 3.Manpower – At least 3 exclusively for microfinance operations; if start up, should plan for at least 3 4.Asset size – Should conform with BSP guidelines 5.CAMELS rating – At least 3 1.Track record - at least 3 years as a bank; may be on start up basis in microfinance 2.Microfinance clients - At least 50; if start up, must plan for at least 50 3.Manpower – At least 3 exclusively for microfinance operations; if start up, should plan for at least 3 4.Asset size – Should conform with BSP guidelines 5.CAMELS rating – At least 3

18. Micro Finance Facility- MICRO-LOCAL MICRO-LOCAL Minimum Qualification of MFI-Borrower 6. Financial ratios Current Ratio – At least 1.0 Capital Adequacy Ratio (CAR) – At least 10% (per BSP guidelines Microfinance Portfolio at Risk (PAR) - Not more than 10% Past Due Rate – Should not exceed 20%, preferably within industry average 6. Financial ratios Current Ratio – At least 1.0 Capital Adequacy Ratio (CAR) – At least 10% (per BSP guidelines Microfinance Portfolio at Risk (PAR) - Not more than 10% Past Due Rate – Should not exceed 20%, preferably within industry average

19. MICRO-LEAPMICRO-LEAP Micro lending thru small microfinance providers such as community cooperatives and local non-government organizations (NGOs) or peoples organizations (POs) who do not meet the SBGFC standards under Micro-LEAD. Micro lending thru small microfinance providers such as community cooperatives and local non-government organizations (NGOs) or peoples organizations (POs) who do not meet the SBGFC standards under Micro-LEAD.

20. Micro Finance Facility- MICRO-LEAP MICRO-LEAP Target Conduits Small Community Cooperatives Small Non-Government Organizations (NGOs) Peoples Organizations (POs) Lending Companies Small Community Cooperatives Small Non-Government Organizations (NGOs) Peoples Organizations (POs) Lending Companies Purpose of Loan Retail re-lending to micro borrowers

21. Micro Finance Facility- MICRO-LEAP MICRO-LEAP Loan Amount Minimum of P200 Thousand Maximum of P10 Million on the first year Maximum of P20 Million on the succeeding years Minimum of P200 Thousand Maximum of P10 Million on the first year Maximum of P20 Million on the succeeding years Line Drawdown Minimum of P100 Thousand Maximum of 20% of credit line Minimum of P100 Thousand Maximum of 20% of credit line

22. Micro Finance Facility- MICRO-LEAP MICRO-LEAP Term and Line Expiry One year credit line, subject to renewal One year only; may be up to 2 years, only if justified by nature of micro-borrowers business as in the case of graduating micros One year credit line, subject to renewal One year only; may be up to 2 years, only if justified by nature of micro-borrowers business as in the case of graduating micros Repayment Term per Drawdown 360 days, payable quarterly Security Continuing Surety Agreement on principals (must) Hard collateral may be required on case to case basis Continuing Surety Agreement on principals (must) Hard collateral may be required on case to case basis

23. Micro Finance Facility- MICRO-LEAP MICRO-LEAP Minimum Qualifications of MFI-Borrower 1.Asset size – At least P500 Thousand (P1.5 Million for lending companies) 2.Net Worth – At least P300 Thousand 3.Track record - at least 1 year microfinance operations (at least 3 years for lending companies) 4.Microfinance clients - At least 20 micro borrowers 5.Manpower – At least 2, one of whom may be part- time 1.Asset size – At least P500 Thousand (P1.5 Million for lending companies) 2.Net Worth – At least P300 Thousand 3.Track record - at least 1 year microfinance operations (at least 3 years for lending companies) 4.Microfinance clients - At least 20 micro borrowers 5.Manpower – At least 2, one of whom may be part- time

24. Micro Finance Facility- MICRO-LEAP MICRO-LEAP Minimum Qualification of MFI-Borrower 6. Financial ratios Current Ratio – At least 1.2 Capital Adequacy Ratio – At least 20% Microfinance Portfolio-at-Risk (PAR) * – Not more than 10% Past Due Rate – Not more than 20% 6. Financial ratios Current Ratio – At least 1.2 Capital Adequacy Ratio – At least 20% Microfinance Portfolio-at-Risk (PAR) * – Not more than 10% Past Due Rate – Not more than 20% MFIs in the RuMEPP priority provinces that do not pass the PAR requirement may still be considered for accreditation if they have a CAR of not less than 20% and a PDR of not more than 10%

25. MICRO-LEAD Minimum - Maximum - MICRO-LOCAL Minimum - Maximum- MICRO-LEAP Cooperatives- Other Conduits - MICRO-LEAD Minimum - Maximum - MICRO-LOCAL Minimum - Maximum- MICRO-LEAP Cooperatives- Other Conduits - Interest Rates 9.5% p.a. 9.7% p.a. 9.5% p.a. 11.0% p.a. 10.5% p.a. (Starting Nov. 23, 2007)

26. Service Fees FEES Micro Finance Facility MICRO-LEADMICRO-LOCALMICRO-LEAP Evaluation Fee 0.05% of approved credit line but not less than P3,000 0.1% of approved credit line but not less than P3,000 0.2% of approved credit line but not less than P3,000; 0.5% for lower classification conduits Processing Fee 0.1% of loan availment 0.25% of loan availment but not less than P1,000 0.5% of loan availment but not less than P1,000 Out-of-Town Fee None for MFIs based in Metro Manila, Cebu and Davao City P2,000 for CALABAR and Region 3 provinces P4,000 or actual airfare for the rest of the country

27. Pass-on Rate Incentive Incentive is given to MFI conduits whose average monthly pass-on rate, inclusive of service fees, is kept at 2.5% for retailers 1.2% for wholesalers Incentive is given to MFI conduits whose average monthly pass-on rate, inclusive of service fees, is kept at 2.5% for retailers 1.2% for wholesalers Evaluation and availment processing fees, which are deducted from MFIs loan proceeds, will be returned in a form of a rebate upon credit line renewal.

28. Documentary Requirements 1.Accomplished Loan Application Form (SBGFC form) 2.Notarized Client Information Sheet with 1x1 recent ID picture of each principal stockholder/officer (SBGFC form) 3.Business registration papers 4.Board Resolution to borrow and on authorized signatories with specimen signature/s 5.Audited Financial Statements for the past 3 years, if applicable 6.Latest interim Financial Statements (not more than 6 months old) 1.Accomplished Loan Application Form (SBGFC form) 2.Notarized Client Information Sheet with 1x1 recent ID picture of each principal stockholder/officer (SBGFC form) 3.Business registration papers 4.Board Resolution to borrow and on authorized signatories with specimen signature/s 5.Audited Financial Statements for the past 3 years, if applicable 6.Latest interim Financial Statements (not more than 6 months old) Upon Application/Line Accreditation

29. Documentary Requirements 7.Organizational Structure/Background Information 8.Schedule of borrowings including repayment term, collateral cover and credit status 9.Certificate of Good Standing from creditors (if applicable) 10.Aging of loan portfolio 11.Schedules of the following: Past due loans Microfinance PAR, if applicable Loan-loss provisioning 7.Organizational Structure/Background Information 8.Schedule of borrowings including repayment term, collateral cover and credit status 9.Certificate of Good Standing from creditors (if applicable) 10.Aging of loan portfolio 11.Schedules of the following: Past due loans Microfinance PAR, if applicable Loan-loss provisioning

30. Documentary Requirements 1.Updated financial statements (with MF-PAR schedule, if applicable) Strictly not more than 2 months old from date of loan availment and should reflect past 20% availment Strictly not more than 2 months old from date of loan availment and should reflect past 20% availment 2.Sub-borrower validation* report, to be done by SBGFC Monitoring Dept. (for conduits with at least P2.0 Million credit line only) – every 20% or P5 Million availment, whichever is higher Large MFIs – every 20% or P5 Million availment, whichever is higher – every 20% or P1.5 Million availment, whichever is higher Medium-sized MFIs – every 20% or P1.5 Million availment, whichever is higher – every 20% or P2.0 Million availment, whichever is higher Lower qualification conduits – every 20% or P2.0 Million availment, whichever is higher *Validation of at least 20% of the number of sub-borrowers based on the liquidation report submitted by the MFI or 20 sub-borrowers, whichever is lower. 1.Updated financial statements (with MF-PAR schedule, if applicable) Strictly not more than 2 months old from date of loan availment and should reflect past 20% availment Strictly not more than 2 months old from date of loan availment and should reflect past 20% availment 2.Sub-borrower validation* report, to be done by SBGFC Monitoring Dept. (for conduits with at least P2.0 Million credit line only) – every 20% or P5 Million availment, whichever is higher Large MFIs – every 20% or P5 Million availment, whichever is higher – every 20% or P1.5 Million availment, whichever is higher Medium-sized MFIs – every 20% or P1.5 Million availment, whichever is higher – every 20% or P2.0 Million availment, whichever is higher Lower qualification conduits – every 20% or P2.0 Million availment, whichever is higher *Validation of at least 20% of the number of sub-borrowers based on the liquidation report submitted by the MFI or 20 sub-borrowers, whichever is lower. Subsequent Loan Release Requirements

31. Documentary Requirements 3.Simple listing of end-borrowers using SBGFCformat 3.Simple listing of end-borrowers using SBGFC format With proof and details of prior disbursements if credit line is less than P2.0 Million With proof and details of prior disbursements if credit line is less than P2.0 Million 4.Other pre-release documents for succeeding availments, as required by SBGFC 3.Simple listing of end-borrowers using SBGFCformat 3.Simple listing of end-borrowers using SBGFC format With proof and details of prior disbursements if credit line is less than P2.0 Million With proof and details of prior disbursements if credit line is less than P2.0 Million 4.Other pre-release documents for succeeding availments, as required by SBGFC Subsequent Loan Release Requirements

32. HEAD OFFICE 17 th & 18 th Floors 139 Corporate Center 139 Valero St. Salcedo Village, Makati City Tel. No. : 751-1888 Fax No. : 894-1677 or 8135726 Website : www.sbgfc.org.ph HEAD OFFICE 17 th & 18 th Floors 139 Corporate Center 139 Valero St. Salcedo Village, Makati City Tel. No. : 751-1888 Fax No. : 894-1677 or 8135726 Website : www.sbgfc.org.ph SBC Offices LUZON OFFICES LA UNION DESK OFFICE La Union Trade Center City Hall Complex Quezon Ave. San Fernando City, La Union Telefax No.: (072) 242-7647 LA UNION DESK OFFICE La Union Trade Center City Hall Complex Quezon Ave. San Fernando City, La Union Telefax No.: (072) 242-7647 BICOL DESK OFFICE FEDMACSI Bldg., Panganiban Drive Naga City Telefax No.: (054) 473-9975 BICOL DESK OFFICE FEDMACSI Bldg., Panganiban Drive Naga City Telefax No.: (054) 473-9975 ISABELA DESK OFFICE Rm. 4 2 nd Floor OH Commercial Bldg. San Fermin, Cauayan City Tel. No. : (078) 652-1964 ISABELA DESK OFFICE Rm. 4 2 nd Floor OH Commercial Bldg. San Fermin, Cauayan City Tel. No. : (078) 652-1964

33. SBC Offices TACLOBAN DESK OFFICE c/o DTI-Region 8 Nacida Bldg. Government Center, Pawing Palo, Leyte Telefax No. : (053) 323-8385 TACLOBAN DESK OFFICE c/o DTI-Region 8 Nacida Bldg. Government Center, Pawing Palo, Leyte Telefax No. : (053) 323-8385 ILOILO DESK OFFICE c/o DTI Region 6 Mezzanine Floor DTI Bldg., JM Basa cor. Peralta St., Iloilo City Tel. No. : (033) 335-0060 Fax No. : (033) 335-0083 ILOILO DESK OFFICE c/o DTI Region 6 Mezzanine Floor DTI Bldg., JM Basa cor. Peralta St., Iloilo City Tel. No. : (033) 335-0060 Fax No. : (033) 335-0083 VISAYAS AREA OFFICE Unit 802-B Keppel Center Ayala, Cebu City Tel. No. : (032) 232 – 1200 Fax No. : (032) 234 – 4500 VISAYAS AREA OFFICE Unit 802-B Keppel Center Ayala, Cebu City Tel. No. : (032) 232 – 1200 Fax No. : (032) 234 – 4500 VISAYAS OFFICES MINDANAO OFFICES MINDANAO AREA OFFICE 7 th Floor Unit 76 Landco Corporate Center JP Laurel Ave. Bajada, Davao City Tel. No.: (082) 221 – 1488 Fax No. : (082) 221 – 0858 MINDANAO AREA OFFICE 7 th Floor Unit 76 Landco Corporate Center JP Laurel Ave. Bajada, Davao City Tel. No.: (082) 221 – 1488 Fax No. : (082) 221 – 0858 CAGAYAN DE ORO DESK OFFICE c/o DTI Region 10 Corrales cor. Luna St. Cagayan de Oro City Tel. No. : (088) 231-5703 CAGAYAN DE ORO DESK OFFICE c/o DTI Region 10 Corrales cor. Luna St. Cagayan de Oro City Tel. No. : (088) 231-5703 GENERAL SANTOS DESK OFFICE c/o DTI-General Santos City Osmena South St., Gen. Santos City Tel. No. : (083) 552-8385 Fax No.: (083) 553-1032 GENERAL SANTOS DESK OFFICE c/o DTI-General Santos City Osmena South St., Gen. Santos City Tel. No. : (083) 552-8385 Fax No.: (083) 553-1032

34. Microfinance gives a poor person a chance to take destiny in his hands and get out of poverty with his efforts.

35. … the rural micro entrepreneurs are the innovators, the risk- takers, the hardworkers and the heroes. All that we can do is to improve their access to the means they can use to achieve their own ends. – Professor Malcolm Harper

36. Thank you.