Lending Policies

PRESENT:
  • DIR. FREDELINO D. AGPULDO -Chairman/Presiding Officer
  • DIR. MADELINE A. LAGAZO -Vice Chairman
  • DIR. MARILYN P. DALIRE -Member
  • DIR. CORAZON V. ESTORQUIA -Member
  • DIR. ERNESTO O. GAMIAO -Member
  • DIR. EDUARDO Q. GUERIN -Member
  • DIR. INOCENCIO B. TABLADA JR. -Member
  • MR. TEODORO A. BALANAY JR. -General Manager/Ex-officio member

RESOLUTION NO. 72 S’ 2014

RESOLUTION AMENDING THE LENDING POLICIES OF THE CLAVERIA GRASSROOTS MULTI-PURPOSE COOPERATIVE

WHEREAS, the Claveria Grassroots Multi-Purpose Cooperative is extending credit facilities to its members to help them improve their socio-economic status;

WHEREAS, the cooperative had established its lending policies which serve to guide in setting internal control procedures;

WHEREAS, as per periodic review on the policies, there is a need amend the lending policies to conform with the standards to address the unforeseen problems experienced by the cooperative;

NOW THEREFORE, on motion of Dir. Corazon V. Estorquia duly seconded by Dir. Eduardo Guerin; be it

RESOLVED AS IT IS HEREBY RESOLVED by the Board of Directors of the Claveria Grassroots Multi-Purpose Cooperative to amend the Lending Policies of the Claveria Grassroots Multi-Purpose Cooperative to be read as follows:

GENERAL LENDING POLICIES AND PROCEDURES

The CLAVERIA GRASSROOTS MULTI-PURPOSE COOPERATIVE should enforce the following lending policies:
  • The basic lending policy is to provide members of this cooperative with additional funds adequate for their needs and purposes, and on term the borrowers can reasonably be expected to achieve, provided there are adequate justifications and the borrowing members have the paying capacity.
  • No loan shall be released unless a thorough investigation shall have been conducted to determine due execution and authenticity of all documents required, to ascertain the legal and financial capacity of the member-borrower to enter into contracts and to perform the obligation stipulated therein, and to obtain such other information that are necessary to protect the interest of the cooperative.
SOURCES OF FUNDS The lending program shall be sourced from the following:
  • Share Capital
  •  Savings Deposits
  •  Special Savings Deposit/Time Deposit
  •  Revolving Capital
WHO ARE MEMBERS ELIGIBLE TO BORROW?
  • A member who has at least paid the required minimum share capital
  •  A member in good standing and has the capacity to pay
PURPOSES OF LOANS The loan availed by a member may be used for the following:
  • Productive
  • Providential
TYPES OF LOANS
  • Regular loan – This shall be open to all qualified members of the cooperative. The following packages are under this type and may be availed to them, to with:
  1.  Business/Commercial
  2. Real Estate/Housing
  3. Agricultural and fishery
  4. Educational
  5. Medical
  6. Vehicle
  • Salary loan – This shall be open to members who are gainfully employed in government and private institution and are holding/occupying a permanent or a regular position.
  • Special loan – This shall be open to all qualified members whose purposes don’t fall under those enumerated therein.
LOAN AMOUNT
  • Regular loan may be availed of two (2) times the share capital of a member, except on the following instances, when:
  1. The loan is for agricultural and fishery production;
  2. The member has a good credit standing as determined from his previous records of loan repayment, the loan shall be availed thrice (3x) or more than the share capital provided the risk involved shall be covered by sufficient collateral, in cash or in kind.
  • Salary loan may be availed of a maximum of five (5) times the member’s net take home pay.
  • Special loan shall be availed at the following:
  1.  Pensioners – three (3) times of share capital or five (5) times the monthly pension whichever is higher;
  2. Passbook loan service which is equivalent to the share capital and savings deposits
  3. Paluwagan – three (3) times or more of combined share capital, depending upon the capability to pay of the members and the appraisal value of the collateral.
  4. Car/Vehicle loan – New motorcycle or car vehicle as per choice of the member-borrower, risk of which shall be fully covered by sufficient collateral, in cash or in kind
  5. Merchandise – Groceries, dry goods and other commodities, appliances, construction materials, agricultural supplies, equipment, machineries, veterinary drugs and biologics, and pharmaceuticals on credit shall be availed of by members, on a term and interest provided for in a board resolution.
SERVICE CHARGE, INTEREST RATES, PENALTY AND OTHER CHARGES The interest, service charge, penalty and other charges due to the loans shall be at a rate promulgated by the Board of Directors and as provided for in the approved application for loan.

TERM

      1.  Regular
    • Business – two (2) to five (5) years, payable monthly • Real Estate – two (2) to ten (10) years, payable monthly • Agricultural –  Rice production – six (6) months, payable every end of cropping period  Farm equipment and machinery – maximum of ten cropping seasons payable every harvest with pre-paid interest  Livestock and poultry Supervised Piggery (Breeding) – term of two years. Supervised Piggery (Fattening) – payable within six (6) months Poultry – Payable within six (6) months  Fishery – payable within six (6) months • Educational – two (2) years payable monthly • Medical – two (2) years payable monthly
    1. Salary loan–three (3) years or more, payable monthly, but not beyond the retirement.
    2. Special loan –two (2) years payable monthly, except for paluwagan which shall be payable for one hundred twenty days (120 days) and merchandise loan (goods), payable in twenty days, merchandise (appliance), payable in three-six months depending on the kind of appliance and construction materials, payable in three (3) months.

    SECURITY AND COLLATERALS To guarantee the fulfillment of obligation on the part of the member-borrower, the cooperative shall accept any of the following as security to the loan:
    • Maker and Co-makers deposits – The maker and co-makers must have a sufficient unencumbered deposit and share capital and are willing to sign in front of the Loan Officer/Credit Department Head/General Manager/Officers of the cooperative. The said deposit shall not be withdrawn and share capital shall not be sold until full payment of the loan.
    • Real properties – Lands covered with title/s, and/or tax declarations in the name of the member-borrower or of any member of the cooperative who is very willing to act as co-maker can be used as collateral and may be accepted by the cooperative. In case the collateral is not under the name of the borrower, a special power of attorney shall be executed by the owner. A deed of real estate mortgage shall be executed by the registered owner of the real property in favor of the cooperative.
    • Transportation facilities which are not more than five (5) years old, covered by certificate of registration, official receipt, and other documents showing ownership and which are covered by a comprehensive insurance. A deed of mortgage shall be executed in favor of the cooperative.

    VALUATION OF COLLATERAL

    Collateral in any form except share capital and deposits shall be appraised by the authorized Appraiser of the Cooperative
    • Registered and unregistered real properties shall be appraised based on the average of the current and fair market value and the opinion value. Seventy (70) percent of the valuation of the registered real property/ies and sixty (60) percent of the valuation of unregistered properties shall be considered to cover the risk of the loan.

    • Improvement (buildings, machineries, trees) attached to the real estate being mortgaged shall be appraised at fifty (50) percent of the appraised market value of the property. Loans against chattel security shall be fifty (50) percent of net book value.

    COLLATERALS

    The member-borrower shall provide collaterals in any form that is sufficient to cover the risk of the loan. The owner’s duplicate copy of title and/or owner’s copy of latest tax declaration, tax clearance and latest tax receipt, sketch plan of the lot (vicinity map) for real properties and/or original certificate of registration and official receipt of transportation facilities shall be accepted by thecooperative. The registered owner and/or declared owner of the collaterals shall execute a deed of real estate mortgage in favor of the cooperative. In case the member – borrower can’t provide sufficient collateral, he can use other collateral, provided the owner will execute a Special power of attorney in favor of the member-borrower. It shall be the responsibility of the member-borrower to pay registration fees and other miscellaneous expenses incurred in the registration/annotation of the collateral and to update payment of taxes yearly, a xerox copy of which shall be furnished to the cooperative.

    It shall be the responsibility of the cooperative to safeguard the documents of the mortgaged property and to issue clearance of mortgage of the collateral in case full payment is made by the

    member-borrower. In case of default of payment of amortization, the cooperative shall inform the owner of the collateral before its foreclosure.

    REAL ESTATE MORTGAGE

    The real estate mortgage must be duly executed by member-borrower and registered with the Office of the Register of Deeds. A special power of attorney shall form part of the Deed of Real Estate Mortgage, in case of titled properties and to be annotated to the office of the provincial assessor if untitled properties, conferring upon Claveria Grassroots Multi-purpose Cooperative the power to sell the mortgaged property at public auction in the event of foreclosure, in accordance with Act No.3135, as amended by Act No.4118.

    CHATTEL MORTGAGE

    The chattel mortgage must be duly executed by the member-borrower and registered with the Register of Deeds and Land Transportation Office. A special power of attorney (SPA) shall form part of the Deed of Chattel Mortgage conferring upon Claveria Grassroots Multi-purpose Cooperative the power to take possession and to sell the mortgage property in accordance with the rules of courts. The execution of the Deed of Chattel Mortgage must be in accordance with the provisions of Act No. 1508, and must be accompanied by documents evidencing ownership including but not limited to the certificate of registration.

    INVESTIGATION

    The Claveria Grassroots Multi-purpose Cooperative shall conduct a thorough investigation of all documents submitted by the member-borrower in connection with its loan application, and such other circumstances surrounding the application for loan, to determine the authenticity of the documents, the veracity of all the information stated therein, the observance of the legal formalities required by law for the execution of contracts.

    PROVISION FOR DEFAULT – The cooperative shall have the option of declaring the member-borrower in default whenever:
    • The member borrower fails to pay his/her amortization without notice of justifiable cause acceptable to the cooperative;
    • Violation of any provision of the loan agreement;
    • Any of the documents submitted by the member-borrower in securing the loan has been found to be defective or fraudulent, or;
    • When, upon demand of the cooperative, the member-borrower fails or refuses to substitute the mortgaged property/ies with new collaterals, or to provide additional collaterals if the mortgaged property/ies has/have been lost, impaired, or depreciated due to any cause.
    EFFECTS OF DEFAULT
    • Declare the entire loan, with accrued interest and penalties, immediately due and demandable.
    • Declare forfeiture of unencumbered deposits of member-borrower to cover existing loan.
    • Extra-judicially foreclose the mortgaged property in accordance with existing laws.
    • Declare the member-borrower to be suspended or expelled as the case maybe.
    • Avail of other remedies provided by law.
    COLLECTION EXPENSES – Upon default, extra-judicial expenses incurred shall be for the account of the member-borrower. VENUE OF ACTION – Any legal action arising from or in connection with the contract of loan shall be filed before the proper court. The Deed of Real Estate Mortgage shall be accompanied by the following:
    • Duplicate of original owner’s copy of the certificate of title;
    • Owner’s copy and Certified true copy of latest tax declaration;
    • Location plan of the property;
    • Tax clearance
    • Special power of attorney when applicable;
    LOAN PROCEDURES Persons/Unit Involved Basic Responsibilities a. Member-Borrower  Secures application for loan form, submits the duly accomplished form to the loan officer together with all the necessary supporting documents. b.Loan Appraiser/Credit Processor  Receives and appraises the loan application and supporting documents and prepares the members’ account verification sheet, forwards to the accounting for verification of account balances. c.Accounting Personnel  Receives the members’ account verification sheet and indicates balances and comment thereon. d. Loan Officer  Receives the verified members’ account verification sheet, pre-evaluates.  Submits to the Department Head for final processing and evaluation. e. Department Head  Receives processes and evaluates the application together with the supporting documents and recommends to the General Manager/Board of Directors for approval. In case of disapproval of the application, the member-applicant shall be notified immediately. f. Finance Officer  Receives processed-approved loan application;  Disburses the proceeds of the loan to the member-applicant g.Accounting Department  Records transactions RESOLVED FURTHER that this resolution shall take effect upon approval; RESOLVED FINALLY that all resolutions or orders inconsistent with this resolution are automatically amended; APPROVED UNANIMOUSLY. ADOPTED this 20th day of September 2014 at the Claveria Grassroots Multi-Purpose Cooperative, Claveria, Cagayan.

                                                                                        CERTIFIED CORRECT: FREDELINO D. AGPULDO BOD Chairman/Presiding Officer

    MADELINE A. LAGAZO MARILYN P. DALIRE CORAZON V. ESTORQUIA
    Vice-Chairman  Member Member
    ERNESTO O. GAMIAO  EDUARDO Q. GUERIN  INOCENCIO B. TABLADA JR.
    Member Member Member
     

    ATTESTED: CRESENCIO M. BALDUGO Executive Secretary