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INTRODUCTION

KASAPI- Kaagapay sa Pangkanuhayan Lending, Inc. (KKPLI) started to operate as

group and individual lending through Pangkabuhayan Group Loan Program which caters group

clients; and Pangkabuhayan Individual Loan Program which provides product and services for

individual borrowers.

Like in KASAPI Microfinance & Rural Development Inc. (KMRDI), the loans of KKPLI

clients are based on the capacity to pay (cash flow) and their character (attitude in payment).

KKPLI may also require safekeeping of collaterals for security purposes depending on the loan

amount of the client.

Now, KASAPI – Lending opens windows for other products and services which clients can

avail. KASAPI – Lending loan programs are divided into two groups. One group is for income-

generating activities for potential entrepreneur clients while the other group of programs is

provided to KKPLI members for other helpful purposes.

These are the loan programs that KASAPI offers:

A. Regular Loan Programs: B. Special Loan Programs:


 Small Business Loan (SBL)  Rice Consumption Loan (RCL)
 Agri Loan  SKYdirect Loan (SDL)
 Salary Loan (Secured)
 Commercial Loan
 Motor Vehicle Loan (MVL)

C. Capital Build-Up (CBU) D. Micro-insurance (KAMPI)


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The KASAPI – LENDING BRANCH in City of San Fernando only offers the Small

Business Loan (SBL), Agri Loan, Salary Loan (Secured), Commercial Loan, and their special

loan programs such as Rice Consumption Loan (RCL), and the SKYdirect Loan (SDL). They do

not offer the Motor Vehicle Loan and the Micro-insurance. The KASAPI – LENDING

BRANCH in the City of San Fernando started in 2010 and it is headed by the branch manager

namely Mr.Ric Bernal Jr. and there are 9 employees who operates this branch.

The preceding topics contain the features, policies, and procedures on their loans

program.
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I. Small Business Loan Program (SBL)

The Small Business Loan Program is a financial assistance served by KASAPI to

small entrepreneurs’ used for additional working business capital with a minimum loanable

amount of ten thousand pesos based on cash flow, capacity to pay and business use and collateral

requirements. The features of program, policies and procedures are shown in table 1 below.

Table 1. Features, Policies and Procedures for SBL

FEATURES DESCRIPTION
1. Purpose - Additional capital for existing business
2. Type of Lending - Individual Lending
3. Target clients - Individuals with existing business
4. Client Eligibilities
4.1 Length of Membership - New or renewal
4.2 Repayment History - For renewal or post-SBL clients, must not have
loan in arrears
4.3 Age - 18 to 70 years old
4.4 Residency - At least one (1) year permanent resident of the
barangay
4.5 Capital Build-up (CBU) - 17% of the principal loan amount amortized
Requirement throughout the long term
4.6 Health Condition - Physically fit
4.6 Business Requirement and - With business existing for at least six (6)
Capacity months, and with net income of at least 25%
higher than the monthly amortization
5. Documentary Requirements
5.1 P7,000 – P14,000 amount of loan a. Original Barangay Business Clearance with
KASAPI loan purpose with Dry Seal
b. Business Pictures (1 shot inside and 1 shot
outside the store showing the business signage)
c. Latest Proof of Billing
d. Latest 3 pcs. 1x1 pictures
e. Photocopy of Valid ID of maker and co-
maker/s
f. Proof of other source of income (if any)
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g. 1 solvent co-maker
h. If co-maker is employed, photocopy of
company ID, COE or last 2 recent pay slip is
required.
5.2 P15,000 – P20,000 i. Above mentioned plus:
j. 1 solvent co-maker for P15,000
k. 2 solvent co-makers for P16,000 to P99,000
l. Photocopy of Barangay/Business Permit of co-
maker/s
m. Business Pictures of co-makers (1 shot inside
and 1 shot outside the store showing the
business signage)

5.3 P21,000 – P25,000 n. Above mentioned plus:


o. Post Dated Checks (PDC). The account must be
at least 6 months in existence
p. Suppliers sales invoices that has address and
contact number for verification (if applicable)
q. Appliances as collateral will be accepted up to
P25, 000 loan amounts
5.4 P26,000 – P99,000 r. Above mentioned plus:
s. Hard Collateral (TCT or OR/CR of vehicle for
safe keeping but ready for mortgage if needed)
t. PDC

6. Mode of Loan Release - Lump sum


7. Loan Size - P7,000 to P99,000
8. Loan Proceeds Allocation - 100% cash for business expenses
9. Loan Term - Minimum of 1 month and maximum of 6
months
10. Interest Rate
10.1 Daily and weekly - 4.5% per month
10.2 Semi-Monthly or Monthly - 5% per month
.5% less if payment is through PDC
11. Charges and other Fees
11.1 Processing Charge - Pre-deducted; computed based on the loan
amount availed
12. Insurance
12.1 Loan Redemption Plan - Total fee is Pre-deducted; computed based on
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the loan amount availed


12.2 Kami Ay mga Mamamayang may - Pre-deducted – P135 Amortized P5 daily / P25
Proteksiyong Inaasahan (KAMPI) weekly / P50 semi-monthly / P100 monthly
though out the loan term
13. Repayment Frequency - Daily, weekly, semi-monthly or monthly
14. Mode of Payment - Cash or PDC
15. Guarantees
15.1 P7,000 – P15,000 amount of loan - 1 co-maker (client or non-client)
15.2 P16,000 and above - 2 co-makers (clients or non-clients)
16. Penalties - 6% of past due amount
17. Renewal - For loan renewals, less balance should not
exceed 25% of the principal current loan
amount
18. Rebate - Pre-termination of the loan will be allowed and
the rebate of 50% on the remaining interest
charge will be granted (at least one month prior
to loan maturity
19. Returnee - Clients who have closed account and after no
longer than 4 months, plan to avail loan again
- Returning clients must undergo CI/BI
20. Other conditions - None

II. Agri Loan Program (ALP)

It is a loan program extended for farmers used for additional agriculture fund to

finance its agricultural activities and the minimum amount is ten thousand pesos. The features,

policies and procedures are shown in table 2 below.

Table 2. Features, Policies and Procedures of ALP

FEATURES DESCRIPTION
1. Purpose - For farm maintenance
2. Type of Lending - Individual lending
3. Target clients - Farmers
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4. Client Eligibilities
4.1 Length of Membership - New or renewal
4.2 Repayment History - For renewal, must not have loan in arrears
4.3 Age - 18 to 70 years old
4.4 Residency - At least one (1) year permanent resident of the
barangay
4.5 Capital Build-up (CBU) - 17% of the principal loan amount to be
Requirement deducted in the loan proceeds. NO CBU is also
allowed
4.6 Health Condition - Physically fit
4.6 Farm Requirement and - With agricultural property of at least 1 hectare
Capacity - Preferably with other source/s of income

5. Documentary Requirements
5.1 For P10,000 to P20,000 amount of a. Original Barangay Clearance with “for
loan KASAPI loan purpose” duly signed by the
Barangay Captain or with barangay dry seal.
b. BARO/BARC Certificate stating that the
applying borrower is the legitimate owner or
the actual farmer tilling the farm land
c. Picture of farm / sketch of the farm land
d. 2 pcs. latest 1x1 picture
e. Photocopy of valid ID with 3 specimen
signature
f. Usufruct Agreement with the land owner in
case of rented/lease land
g. Proof of other source/s of income (remittances
or Barangay Clearance indicating that the client
is operating other business other than farming)
h. Photocopy of Business Permit of co-makers are
employed, or BARO/BARC Certificate if they
also have farm
5.2 For P21,000 to P99,000 i. Above mentioned plus:
j. OR/CR or TCT for safekeeping, with duly
accomplished Dacion en pago (means the
giving back of the property mortgaged to the
lender in exchange for the discharge of a
mortgage debt.)
6. Mode of Loan Release - Lump sum
7. Loan Size - P10,000 up to P99,000
8. Loan Proceeds Allocation - 100% cash - for farm expenses
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9. Loan Term
9.1. 4 to 6 months - Loan maturity must be synchronized with the
expected date of harvest.
10. Interest Rate - 4.5% per month
11. Charges and other Fees
11.1 Processing Charge - Pre-deducted; computed based on the loan
amount availed
12. Insurance
12.1 Loan Redemption Plan/ Crop - 1% of the principal loan amount monthly
Redemption Plan
12.2 Kami ay mga Mamamayang may - Pre-deducted – P135 + P100 monthly
Proteksiyong Inaasahan (KAMPI) depending on the loan term
13. Repayment Frequency
13.1 Semi-monthly/monthly - Interest payment and lump-sum upon maturity
13.2 Lump sum - Principal + Interest upon maturity
14. Mode of Payment - Cash/PDC/Palay
15. Guarantees
15.1 Guaranteed by two (2) co-makers - 1 relative and 1 non-relative
- Must also be engaged into farming, have
existing business or are currently employed
16. Penalties - 6% of past due amount
17. Rebate - Pre-termination of the loan will be allowed and
the rebate of 50% on the remaining interest
charge will be granted (at least one month prior
to loan maturity
18. Returnee - Clients who have closed account and after no
longer than 4 months, plan to avail loan again
19. Other conditions - None
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III. Salary Loan Program

A loan program extended for those regular and permanent employees of any private

or public institutions such as schools, government offices, local hospitals, private offices, etc.

The features, policies and procedures are shown in table 3 below:

Table 3. Features, Policies and Procedures of SLP

FEATURES DESCRIPTION
1. Purpose - Multi-Purpose
2. Type of Lending - Individual Lending
3. Target clients - Employees
4. Client Eligibilities
4.1 Length of Membership - New or renewal
4.2 Prepayment History - For renewal, must not have loan in arrears
4.3 Age - 18 to 70 years old
4.4 Residency - With the present serving areas of KASAPI
4.5 Capital Build-up (CBU) - None
Requirement - If the client agreed to accumulate CBU, 17% of
the principal loan amount amortize throughout
the loan term.
4.6 Health Condition - Physically fit

4.7 Employment Requirement and - Regular private or public employees,


Capacity - preferably with other sources of income,
- KASAPI probationary employees are allowed,
but must be guaranteed by 2 co-makers to
where 1 of them should be a regular employee
of KASAPI
5. Documentary Requirements a. Properly accomplish KASAPI loan Application
Form
b. 3 pcs. 1x1 ID picture of applicant and 1 1x1
picture each for co-maker
c. 2 co-makers which are also regular employees
if employed or with business
d. Certificate of Employment (COE) stating the
employment status, length of tenure and
monthly salary
e. Photo copy of company ID
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f. 2months pay slip(latest)


g. For client who will surrender his/her ATM: last
2months statement of account, PIN code of
ATM
h. Latest proof of billing
i. Proof of other source of income.
j. Residence sketch of applicant and co-makers
6. Mode of Loan Release - Lump sum
7. Loan Size - Minimum of 7,000 provided that the monthly
net take home pay should be at least 7,000 after
the computed amortization for salary loan

8. Loan Proceeds Allocation - 100% cash


9. Loan Term - Minimum of 1 month and maximum of 2 years
10. Interest Rate - 2% per month if the client will surrender his/her
ATM to where the monthly salary is deposited.
- 4.5% per month if payment is through
collection of FA
- 4% per month if payment is, through PDC
11. Charges and other Fees
11.1 Processing Charge - Pre-deducted; computed based on the loan
amount availed
12. Insurance
12.1 Loan Redemption plan - 5% per month of principal loan amount
12.2 Kami ay may Mamamayang may - P135 Amortized P50 semi-monthly throughout
Proteksyong inaasahan the loan term
(KAMPI)/Life Insurance
13. Repayment Frequency - Semi- Annually
14. Mode of Payment - ATM, Cash or PDC
15. Guarantees
15.1 Guaranteed by two (2) co- - Must have existing business or regular
makers employees (if employed)
- for KASAPI probationary employees, one of the
co-makers should be a regular employee of
KASAPI
16. Penalties - 6%
17. Renewal - For loan renewals, Less Balance should not
exceed 25% of the principal balance
18. Rebate - Pre- termination of the loan will be allowed and
the rebate of 50%on the remaining interest
charge will be granted (at least 1 month prior to
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maturity of loan)
19. Returnee - Clients who have closed accounts and after no
longer than 4 months, plan to avail loan again
- Returning clients must undergo CI/BI
20. Other conditions - Co-makers should also submit COE if
employed or business permit if employed or
business permit for those with business
- Policemen, members of the Philippine Air
Forces, employees of the courts, BIR
employees, Brgy. Officials or any elected
government officials are not qualified

IV. Commercial Loan Program

A type of loan given to qualified borrowers with collateral (Real Estate Mortgage). This

loan will serve as an additional capital for business. The features policies and procedures are

shown in table 4 below.

Table 4. Features, Policies and Procedures of CLP

FEATURES DESCRIPTION
1. Purpose - Additional capital for existing business
2. Type of Lending - Individual Lending
3. Target clients - Entrepreneurial Men and Women
4. Client Eligibilities
4.1 Length of Membership - New or renewal
4.2 Prepayment History - For renewal, must not have loan in arrears
4.3 Age - 18 to 65 years old
4.4 Residency - At least one (1) year permanent resident of the
barangay
- Residence /Collateral is within present serving
area
- Business existence at least (60 months
4.5 Health Condition - Physically fit
4.6 Employment Requirement and - Regular private or public employees,
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Capacity - preferably with other sources of income,


- KASAPI probationary employees are allowed,
but must be guaranteed by 2 co-makers to
where 1 of them should be a regular employee
of KASAPI
4.7 Source of Income - Salaries & wages, allowances, bonuses
- Commissions
- Net rental income
- Income from business operations
- Pension
- Dividends & interest income
- Professional fees
- Seasonal income
- Remittances

5. Documentary Requirements a. Application Form (duly filled out)


b. Latest 2x2 ID picture
c. Co-maker’s statement if 60-65 years of age
d. 2 valid ID’s
e. Inspection fee/ Appraisal
f. Xerox Copy of OTC / TCT / CCT
g. Photocopy of latest Tax Declaration, Tax
Receipt & Tax Clearance ( Lot & Building)
h. Approved vicinity map / lot plan duly signed by
a Geodetic Engineer
i. Building Plans, Bill of materials (if applicable)
j. Mayors Permit and DTI Permit
k. Barangay Clearance
l. ECC Permit (if applicable)
m. PROOF OF Billing Address
n. BARC & MARO Certificate (AGRI)
o. Deed of undertaking (if applicable)
p. Affidavit of Non-tenancy (AGRI)
q. DAR Certificate of Non-Tenancy (AGRI)
r. Financial Statement and ITR (if applicable)
s. Latest Bank Statement / Passbook (last 3
months)
t. Proof of income (sales Invoice, delivery receipt,
pay slip and delivery receipt)
u. Articles and by Laws (if corporation)
v. Secretary’s certificate (if Corporation)
w. Appraisal fee of P2,000 and additional P1,000
for each other title / CM – P750
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6. Acceptable Collateral a. Original Certificate of Titles (OCT)


b. Transfer Certificate of Titles (TCT)
c. Condominium Certificate of Titles (CCT)
d. Motor Vehicle

7. Residential /Commercial a. Classified/highest best use and with zoning of


either residential commercial
b. Shall have at least a declared ROAD (right or
way) of not less than 3.0 meters
c. Accessible to all types of vehicles, with
complete service utilities (water & electricity)

8. Agricultural/Industrial a. Classified / highest best use and with zoning of


either agricultural/industrial
b. Used for agricultural and industrial production
c. For agricultural – irrigate/un-irrigated and
levelled terrain
d. Non-tenanted and actual tillers should be the
owner

9. Condominium Certificate of Title a. Duly registered in the name/s of the borrower/s


(CCT) or spouse with corresponding Tax Declaration
Clearance on monthly dues
b. Building shall not be more than 25 years
Tax payments shall be paid for current and
previous years
c. No discrepancies on technical
descriptions/names of registered owners.
Transfer of ownership is not questionable and
doubtful

10. Mode of Loan Release - Lump sum


11. Loan Size - P100,000 above
12. Loan Proceeds Allocation - 100% cash for buss. Expenses
13. Loan Term - Minimum of 1 month and maximum of 5 years
14. Interest Rate - 16% - 18%
15. Charges and other Fees
15.1 Processing Charge - Pre-deducted; computed based on the loan
amount availed
16. Insurance
16.1 Loan Redemption plan - Total fee is pre-deducted; computed based on
the loan amount availed
16.2 Kami ay may Mamamayang
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may Proteksyong inaasahan - Pre-deducted – P135 Amortized P100 monthly


(KAMPI)/Life Insurance throughout the loan term
16.3 Fire Insurance - Total fee is pre-deducted; computer based on
the loan amount availed

17. Repayment Frequency - Semi- Annually


18. Mode of Payment - PDC
19. Penalties - 6% per month
20. Renewal - For loan renewals, Less Balance should not
exceed 25% of the principal current loan
amount
21. Rebate - Pre- termination of the loan will be allowed and
the rebate of 50%on the remaining interest
charge will be granted (at least one month prior
to maturity of loan)
22. Returnee - Clients who have closed accounts and after no
longer than 4 months, plan to avail loan again
- Returning clients must undergo CI/BI
23. Other conditions - Special power of Attorney can be issued to a
relative up to 2nd degree of consanguinity/ 1st
degree affinity
- Real state shall not be a subject of lawsuit
(lispendens, adverse claim, levy, and the like)
- Shall not be within a flooded, earthquake and
landslide prone areas
- Should not be adjacent/ fronting an exceptional
uncharacteristic property like Public cemetery,
dumpsite/ sanitary landfill, hazardous factory,
creeks/rivers, squatters, etc.
- No discrepancies on technical descriptions/
names of registered owners
- Transfer of ownership is not questionable and
doubtful
- Shall not be partially cancelled or subdivided
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V. Rice Consumption Program (RCP)

A special loan window that aims to provide clients with opportunity of having optimum

quality of rice at marked down price. It is synchronized with their principal loan. This new

program is in line with KASAPI Enterprises’ vision of becoming one of the well-known

producers of quality rice in the City of San Fernando. The policies and procedures are shown in

table 5 below.

Table 5. Policies and Procedures of RCP

FEATURES DESCRIPTION
1. Purpose - Supplemental
2. Type of Lending - Individual Lending
3. Target clients - Individuals or households
4. Client Eligibilities
4.1 Length of Membership - New clients, without regular loan
- Clients with existing regular loan
4.2 Prepayment History - For clients with existing/ previous regular loan,
must have loan in arrears
4.3 Age - 18 to 70 years old
4.4 Residency - At least one (1) year permanent resident of the
barangay
4.5 CBU Requirement - None
4.6 Health Condition - Physically Fit
4.7 Business Requirement and - Same with existing regular loan
Capacity
4.8 Documentary Requirements - Duly accomplished RCP application form
5. Mode of Loan Release - One time released of time availed sack/s of rice
6. Loan Size
6.1 Client with existing regular loan - P100,000 above
6.2 Client without existing regular - Minimum of (1) sack, max. 2 (if beyond, by
loan request)
6.3 KASAPI employees - Maximum of 2 sacks probationary, maximum
of 4 sacks for regular employees;
6.4 Amount - Prevailing price of rice if paid CASH;
- Plus P50 if amortized
7. Loan Proceeds Allocation - Sacks of rice, no cash
8. Loan Term - 1 month
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9. Interest Rate - None


10. Charges and other Fees
10.1 Processing Charge - None
10.2 Delivery Fee - None; orders must be picked up by clients from
the branch
11. Insurance
11.1Loan Redemption plan - Fee is 10 pesos per sack; paid outright/cash
11.2Kami ay may Mamamayang - None
may Proteksyong inaasahan
(KAMPI)/Life Insurance

12. Repayment Frequency - Sync with client’s regular loan


- Every cut-off for KASAPI employees
13. Mode of Payment - Cash
14. Guarantees
14.1 For clients/non-clients - 2 co-makers
14.2 For KASAPI employees - For regular employees- no co-maker required;
- For probationary – 1 regular employee as co-
maker
15. Penalties - 6%
16. Renewal - For regular loan clients, they can avail RCL
again after finishing the one-month term
17. Rebate - N/A
18. Returnee - N/A
19. Other conditions - Clients are allowed to return undesirable sack/s
of rice within 5 days after release, provided that,
not more than 5 kilos/sack have been consumed
- For non-clients they are required to pay P60.00
(P50.00 passbook,P10 LRF)
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VI. SKY Direct Loan Program (SDL)

A special loan window provided to clients, who may not have the means to avail in

cash SKY direct digital TV products, giving them the opportunity to have HD TV viewing

experience at affordable rates. The policies and procedures are shown in table 6 below.

Table 6. Policies and Procedures of SDL

FEATURES DESCRIPTION
1. Purpose - For luxury TV viewing
2. Type of Lending - Individual Lending
3. Target clients - Households
4. Client Eligibilities
4.1 Length of Membership - New or clients with existing regular loan
4.2 Prepayment History - For clients with existing/previous regular loan,
must not have loan in arrears
4.3 Age - 18 to 70 years old
4.4 Residency - At least one (2) years permanent resident of the
barangay
4.4 Capital Build-up (CBU) - None
Requirement
4.5 Health Condition - Physically fit
4.6 Business Requirement and - With business existing for at least six (6)
Capacity months, a regular employee or has farm
- With net income of at least 25% higher than the
monthly amortization

5. Documentary Requirements
5.1 For clients with existing regular - Duly Accomplished SDL application form,
loan SDL Loan Agreement, notarized
5.2 For applicants without existing - Duly Accomplished SDL application form,
regular loan SDL Loan Agreement, notarized
- Original Brgy. Clearance
- 2pcs. Latest 1x1 or 2x2 picture
- COE and valid ID if employed
5.3 For KASAPI employees - Duly Accomplished SDL application form,
SDL Loan Agreement, notarized
- Photocopy of ID of the applicant
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- Signature of co-maker on the application form


and ID of the co-maker (if applicant is
probationary)
6. Mode of Loan Release - One-time release of the digital TV kit and the
load for the 1st month
7. Loan Size
7.1 P4,100 loan - Digital TV kit P3,699 + free installation +
P99/month loan for 4 consecutive months
7.2 P4,300 loan - Digital TV kit P3,699 + free installation +
P150/month loan for 4 consecutive months
7.3 P4,700 loan - Digital TV kit P3,699 + free installation +
P250/month loan for 4 consecutive months
7.4 P5,500 loan - Digital TV kit P3,699 + free installation +
P450/month loan for 4 consecutive months
(Above loan size based on 4
months term)
8. Loan Proceeds Allocation - 100% commodities, no cash
9. Loan Term - 1 to 4 months
10. Interest Rate
10.1) 4.0% per month - If applicants has no existing regular loan
10.2) 2.0% per month - If clients have existing regular loan
10.3) 0% per month - KASAPI employees
11. Charges and other Fees
11.1 Processing Charge - None
11.2 Delivery Fee - May be charged for far-off residences
11.3 Notarial Fee - P50
12. Insurance
12.1 Loan Redemption Plan - Fee is 1% of the principal, paid outright/cash
13. Mode of Payment - Cash
14. Guarantees
14.1 for clients - No collateral and co-maker required
14.2 For KASAPI employees - Only probationary will be required to have 1
regular employee as co-maker.
15. Penalties - N/A
16. Renewal - N/A
17. Rebate - N/A
18. Returnee - N/A
19. Other conditions
19.1 Beginning of term and - Term will be start upon the delivery of items
amortization ordered
- A week after receipt, a week amortization
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- Although a client is availed and is paying for


19.2 Release load the 4 consecutive months of load, only the load
for the first month will be initially issued, other
than 3 months load will be as staggered release
based on the repayment of the client;

- If clients, during the term of their loan, wish to


19.3 Increasing the load during the
increase their load, they must pay cash the
term deficiency from the load plan they have availed
in their loan

- If clients missed at least 4 scheduled payments,


19.4 Policy on payment lapses
their satellite antenna, TV box and unreleased
load/s shall be pulled out by KASAPI;

- These clients can redeem the pull out digital TV


19.5 Redemption
kit + load/s if they would bay the amount of
arrears within 7 days only
- However, they will need to pay P 1,000 for
reinstallation;

- After 7 days of non-redemption, clients may


19.6 Forfeiture
apply again as New

19.7 Co-existence with any regular or - Revolving credit line for special loans
amounting to same with client’s regular loan
other special loan
limit
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Strength and Weaknesses Analysis

Analysis is the study of the strengths and weaknesses within the lending institutions and

their credit and collection policies. This will be done by the researchers to synthesize strategies

for improving the credit and collection policies, standards and practices of the lending institution.

Strengths is the advantageous or even unique skill, competency, or service that the lending

institution possesses that allows it to create competitive advantages. A weakness is a strategic

disadvantage, such as skill that the lending institution lacks which limits it and creates potential

risks in negative economic conditions.

STRENGTHS

Stable cash handling. The KASAPI LENDING BRANCH has an effective policy in

handling cash.

Low interest rate. The low interest of their loan programs attract borrowers which are

fixed at 4.5%, and it is below the market-based interest rate. Lending interest rate (%) was

reported at 7.843 in 2018, according to the World Bank collection of development indicators,

compiled from officially recognized sources.

Wide operations. According to our interview, they have also clients outside the city.

Some are from Bauang, Naguilian, San Juan, Luna etc. They provide sustainable and client

responsive solutions to the greater number of Filipino not just here in the city but all in the

province.

Prompt approval and disbursement of their program loans. After the approval of the

Branch Manager, it will be passed to the cashier for the releasing of loan, there is on time
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processing credit line – up to processing of credit application only takes three days unlike other

lending institutions which takes a week.

Accurate record of their credit and collection policies and procedures. The KASAPI

– LENDING Branch has a formal manual book of the credit and collection activities, features,

policies, and procedures for them to master and understand well. This could be the basis to

present its policies and procedures to the customers who wants to avail a loan.

WEAKNESSES

No penalties for SKY Direct loan program. The KASAPI– LENDING doesn’t give

penalties on the customers who availed the sky direct program. Based on the company’s policy

and procedures, they only give penalties on the five programs which are the small business loan

program, Agri-loan program, salary loan program, commercial loan program and rice

consumption program. The customers who availed the programs will only penalize with 6%

penalty rate if they exceeded to the loan term provided by the company.

No interest rate for rice consumption loan program. The KASAPI LENDING doesn’t

give interest rate to the customers who want to avail the rice consumption loan program. The

company may generate low revenue because of not providing interest rate to the customers who

exceeded the loan term.

Numerous loan requirements. The KASAPI LENDING requires the customers who

want to avail loans to pass all the corresponding documentary requirements. All requirements are

listed on their policy and procedures; the customers need to complete all of the requirements

before the loan they want to avail will be granted. It may tend that the customers not to continue

to acquire loan because of the numerous requirements to complete and pass to the loan processor.
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Limited loan programs. The KASAPI LENDING only offers six types of programs to

the customers. They do not offer other loan programs because there are certain processes to

follow and accomplish before the company will grant these loans to the customers.

RECOMMENDATONS

1. The KASAPI Lending should give penalty on SkyDirect loan for them to generate

income in this program. The company should give different penalty rates on each type of

programs because all programs have the same penalty rate. The company should increase

the penalty rate on the program that has a large loan size.

2. The KASAPI LENDING should give an interest rate on the Rice Consumption Loan

Program. Giving interest rate on this program helps the company increase its income and

the company will able to expand its programs to be offered to its valued customers.

3. The KASAPI LENDING should minimize the customer requirements to attract them to

apply loans they want to avail and promote customer retention policy to attain long-term

relationship to the customers who are good payers.

4. The KASAPI LENDING should offer additional programs to the customers like housing

loan, car loan, doctors loan, pensioners loan, and personal loan-land based. These loans

could be helpful to the company to generate higher revenue. The more programs they will

offer to the customers, the higher the income they will get.

5.
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APPENDIX

INTERVIEW DAY