GUIDELINES AND PROCEDURES FOR THE IMPLEMENTATION OF THE RE-ENTRY LOAN FOR DISPLACED WORKERS

In the interest of the service and further to MOI No. 02, Series of
2000, the following guidelines and procedures are hereby prescribed for
the implementation of the Re-Entry Loan for Displaced Workers.

Client Coverage

The credit window is exclusively open to OFWs who have been
displaced or had been caused to prematurely return home due to any of
the following reasons:

1.  natural calamities such as earthquakes, tidal waves, volcanic eruptions, etc. in their countries of employment,

2.  man-made calamities such as wars or political turmoil,
unfavorable economic conditions or emergency situations in their
countries of employment,

3.  contract violations by agencies or employers and other employment-related factors,

4.  serious illnesses of workers that would constrain them to
voluntarily terminate their employment overseas or serious illnesses of
beneficiaries who are totally dependent on the workers that would
similarly result in the returning home of workers ahead of time, and

5.  industry regulations or restrictions on trades or skills that would cause employment disruptions for the workers.

In order to qualify for assistance, an OFW must not have returned to
the county for a period of not more than three (3) years upon the
filing of his/her application for loan under the Re-Entry Loan for
Displaced Workers.

Loan Description

The Re-Entry Loan for Displaced Workers is a supervised credit
window that is intended to create stopgap sources of livelihood for
displaced workers or their beneficiaries.

It is open to individuals, partnership projects of not more than
five (5) members and group projects of six (6) members or more.

The Re-Entry Loan for Displaced Workers has the following features:

Loan Ceiling:	P20,000 per qualified borrower
Interest Rate:	4% per annum
Loan Usage:	Working capital and acquisition of assets for a livelihood project
Collateral Coverage:	Co-Maker or Guarantor System
Payment Terms:
a)    Individual loans	Maximum principal payment term of 18 months
b)    Group loans	Maximum principal payment term of 60 months

Criteria For Individual To Qualify As Co-Maker:

1.         He/she must not be a spouse of the applicant;
2.         He/she must be locally employed with a minimum monthly salary of P10,000.00; and
3.         He/she must be living in the community (town or city) where the project applicant resides.

Criteria For Organization To Qualify As Co-Maker:

1.         The organization must have existed for at least three
years prior to the group applicant’s filing of loan application;
2.         Must be able to cover twice the loan amount with its cash
reserves at the time of project evaluation (as reflected in its audited
financial statements)
3.         Must be holding office in the community (town or city) where the project applicant resides.

Penalty Charges

A penalty charge of 2% per month shall be imposed on the delayed amortization until payment is updated.

Rebate

As a standard lending practice in the LDPO, the program grants
rebates on the unearned interest to a loan proponent who makes a full
settlement of his/her account prior to loan maturity. However, this does
not apply to a proponent who makes a partial advanced payment on
his/her loan.

Loan Requirements

1.         Official document/s that would certify the applicant’s
status as a displaced worker (e.g. certification from the Labor
Center/Welfare Officer/CECOR/Embassy, certification from foreign
employer terminating the services of applicant, certification from host
country’s health authorities/hospital/doctor on the workers’ illness,
certification from POEA/DOLE)

2.         Proof of OWWA Contribution

3.         Current Community Tax Certificate

4.         OFW Consent

4.1  Marital Consent (for married borrowers)
4.2  Authorization (for parent or sibling who is applying on behalf of OFW)

5.         Marriage Contract or proof of marriage

6.         Documents to establish borrower’s relationship with OFW (for legitimate beneficiaries borrowing in place of OFW)

7.         Business Plan

8.         Certificate of Indigency from the LGU Social Worker
(for displaced workers who have returned to the country for more than
one year at the time of application)

9.         2 x 2 ID picture

10.       Sketch of residence and project site

11.       Promissory Note with Notarized Waiver for Salary Deduction (for Individual Co-Maker)

12.       ITR or Certificate of Employment with Annual Compensation of Co-Maker (for individual Co-Maker)

13.       Board Resolution or General Assembly Resolution (for Organization/Cooperative/Association acting as Co-Maker)

14.       Audited Financial Statement (for Organization/Cooperative/Association acting as Co-Maker)

Additional Requirements for Group Applicants:

1.         Certificate of Registration with CDA for cooperative
projects, Securities and Exchange Commission (SEC) registration for
partnerships and corporations

2.         Articles of Cooperation and By-Laws for cooperatives,
Articles of Incorporation for corporations and Partnership Agreement
with Profit-Sharing Scheme for partnerships

3.         Board Resolution/Group Resolution specifying intent to
undertake a group project using capital to be borrowed from the LDPO

4.         Certification of ROU (or partner agency in the case of
groups that they referred) regarding the cohesiveness of the group and
their capability to undertake a group venture or project

Partner Agencies

Partner-agencies, specifically the Ecumenical Commission for
Migrants and Itinerants (ECMI) of the Catholic Bishops Conference of the
Philippines and the Self-Employment Assistance Unit (SEAU) of the
Department of Social Welfare Development, may participate in the
operation of the Re-Entry Loan for Displaced Workers on a municipal,
provincial or regional level by:

1)      Referring individual or group applicants to the Regional OWWA Units for assistance; or

2)      Implementing an approved Displaced Workers Assistance
Scheme in their identified areas that would closely follow the
guidelines and procedures herein set forth.

Proposals for the latter are to be submitted to the Plans and
Programs Office (PPO) for assessment and evaluation of their individual
merits.

The partner-agency may adopt a suitable format for the proposal but must include the following relevant information:

a.   List of Beneficiaries to Benefit from the Scheme;
b.   Requirements 1-6 of Loan Requirements and Appropriate Additional Requirements for Group Projects;
c.   Significant Information on the Partner-Agency including Structure of the Organization;
d.   Status and Extent of Assistance Given to Displaced Workers (or
the agency’s track record in assisting similar beneficiaries);
e.   Detailed Workplan Indicating Time Frame and Important Activities/Tasks;
f.    Detailed Design for Social/Technical Preparation, Monitoring and Collection;
g.   Business Plan; and
h    Draft Memorandum of Agreement between the partner-agency and OWWA

The approval of the Administrator must be secured for any
document or agreement regarding partnerships with allied agencies that
would oblige OWWA in manner.

Availment Procedures

Individual Loans:

For Walk-in Applicants

1.         The applicant undergoes an assessment interview where significant data and information are recorded;

2.         Appropriate trainings are recommended and undertaken;

3.         The proponent submits a business plan together with all other requirements;

4.         The project development officer (PDO) evaluates the
proposal, after determining the sufficiency of information that is
contained in the business plan;

In case of a deficient business plan, the PDO assists the
applicant in organizing the proposal. As appropriate, project evaluation
is endorsed to another project staff;

5.         Approved projects are processed for release;

6.         Applicants of disapproved projects are notified
through registered mail within three (3) working days from conclusion,
clearly stating the reason for the decision;

7.         The applicant is oriented thoroughly on the details of his/her loan prior to loan release; and

8.         Fortnight project monitoring is undertaken on the
first two (2) months of implementation after which monthly monitoring is
continued until project termination or completion of loan amortization.

For clients who are referred by partner-agencies

1.         The partner agency provides all needed information regarding the individual applicants to the corresponding ROU;

2.         The ROU determines eligibility for availment;

3.         Whenever applicable social/technical preparation is
relied on the partner agency, otherwise the ROU assumes responsibility;

4.         The partner agency submits the business plan on behalf of the worker or group of workers;

5.         The ROU project staff evaluates and recommends accordingly based on the merits of the proposal;

6.         Approved projects are processed for release;

Applicants of disapproved projects are notified through registered
mail within three (3) working days from conclusion, clearly stating the
reason for the decision;

7.         Applicants are oriented thoroughly on the details of their loan prior to loan release; and

8.         Fortnight project monitoring is undertaken on the
first two (2) months of implementation after which monthly monitoring is
continued until project termination or completion of loan amortization.

Group Loans :

Walk-in Applicants

1.         Individual members undergo assessment interview where significant data and information are recorded;

2.         The project staff determines eligibility for availment;

3.         The project staff arranges a group meeting with every
member in attendance to discuss loan policies and details of business
plan;

4.         Appropriate trainings are recommended and undertaken;

5.         Projects with funds request of P100,000.00 and below are evaluated and approved at the ROU level;

6.         Projects with funds request of over P100,000.00 are endorsed to the Plans and Programs Office for evaluation;

7.         Approved projects are processed for release;

Applicants of disapproved projects are notified through registered
mail within three (3) working days from conclusion of findings, clearly
stating the reason for the decision; and

8.         Fortnight project monitoring is undertaken on the
first two (2) months of implementation after which monthly monitoring is
to be continued until project termination or completion of loan
amortization.

For clients who are referred by partner-agencies :

1.         The partner-agency provides all needed information
regarding the individual applicant and the organization/group to the
ROU;

2.         The ROU determines eligibility for availment;

3.         Whenever applicable, social and technical preparation
is relied on the partner agency, otherwise the ROU concerned assumes
responsibility;

4.         The partner-agency may submit the business plan on behalf of group applicants;

5.         Projects with funds request of P100,000.00 and below are evaluated and approved at the ROU level;

6.         Projects with funds request of over P100,000.00 are endorsed to the Plans and Programs Office for evaluation;

7.         Approved projects are processed for release;

Applicants of disapproved projects are notified through registered
mail within three (3) working days from conclusion of findings, clearly
stating the reason for disapproval; and

8.         Fortnight project monitoring is undertaken on the
first two (2) months of implementation after which monthly monitoring is
to be continued until project termination or completion of loan
amortization.

By endorsing any project under this credit window, the concerned
ROU assures compliance to the project monitoring requirement as
specified in these guidelines.

FUNDS FOR THE CREDIT WINDOW

There shall be no new accounts to be established in the ROUs for the
Re-Entry Loan for Displaced Workers except for the Autonomous Region
for Muslim Mindanao (ARMM), CARAGA and the National Capital Region
(NCR).

Instead, the Non-Collateralized Loan Fund of the former ELDP shall
be retained and augmented to finance the lending operation of this
credit window.

All existing cash balances, including collectibles from previous
non-collateralized loans, constitute the Non-Collateralized Loan Fund.

Initially, a total of P10 million had been allocated for the
Re-Entry Loan for Displaced Workers. Of this amount, P2,811,000.00 will
be retained in the OWWA Head Office as a block fund to finance group
projects that will be endorsed by the ROUs for approval as well as
separate proposals by partner-agencies.

Fund balances for the Non-Collateralized Loan Fund of every ROU have
been taken into account to bring about an effectively proportionate
distribution of the loan fund for the Re-Entry Loan for Displaced
Workers.

The fund distribution is as follows:

ROU I	P380,000.00
ROU II	483,000.00
ROU III	450,000.00
ROU IV	491,000.00
ROU V	474,000.00
ROU VI	396,000.00
ROU VII	405,000.00
ROU VIII	432,000.00
ROU IX	452,000.00
ROU X	397,000.00
ROU XI	271,000.00
ROU XII	295,000.00
ROU CAR	463,000.00
ROU ARMM	500,000.00
ROU CARAGA	500,000.00
LOD – NCR	800,000.00
TOTAL	P7,189,000.00

APPROVING AUTHORITIES

The approving authorities for the Re-Entry Loan for Displaced Workers are as follows:

P100,000.00 and below	Regional Supervisor
Between P100,001.00 to P300,000.00	Deputy Administrator
Above P300,000.00	Administrator

This Memorandum of Instruction takes effect immediately.

Adopted: 22 Aug. 2000

(SGD.) ELEUTERIO N. GARDINER
Administrator