RELOAN POLICY

Introduction: No special treatment or exemption on requirements on the re-loan applicants. Threat a re-loan applicants as if a new loan in term application, still the loaner has to abide requirements, policies and standard procedures. Here are the conditions for availment of succeeding loans. Attendance Repayment Has adequate cash flow to pay obligations. Has a good standing with the group or the center. Loan amount has been favorably endorsed by the center Loan has 4 weeks of unpaid amortization Other bank obligation Definition of re-loan:

Policy and Procedure: 1.0 Loan Inventory 1.1 Supervisors should monitor account which about to due for the coming month by printing a filtered list of account according to maturity. By that supervisor will be aware what account is near to due and will advise Account officer to prioritize it for inventory. So inventory should be done 0ne month before maturity. 1.2 There must be a file of inventory forms in the office for the accomplished forms so that by the time the client fully paid and want to a re-loan the account officer will now have already his assessment on the clients. 1.3 The caring of loan inventory form is in the supervisor hand it must be kept for this is a requirement for re-loan. No inventory form no re-loan. 1.4 Loan Inventory should be done in the client respective businesses. The actual business situation of the client must be revealed in the inventory form. It is the basis for assessment withers the client is qualified for increased and re-loan. 2.0 Cash Flow 2.1 A cash flow should be conducted upon inventory; this is to determine borrowers capacity to pay. 2.2 Aside from inventory, cash flow is also a basis for re-loan. No cash flow No re-loan. 2.3 It requires thorough interview to determine exact data to come up a just decision for the amount they apply.

3.0 Re-loan Application 3.1 The application should pass in the center for approval in center level after the group endorsement. 3.2 After center approval and assuming requirement are accomplished, the account officer should prepare a loan confirmation and approval sheet as recommendation, then pass to account supervisor for review and check documents and requirements including Loan Inventory and the Cash Flow. 3.3 Supervisor must screen the amount recommend by the A.O. before indorsing it to the manager. Basis for the approval are: Attendance- Look for the attendance record. Repayment- print previous loan ledger. Loan Inventory-Check the inventory form Cash flow- Check the cash flow Center approval- look for the approval on the application form Other bank obligation. With good standing in the group and center. 3.4 Supervisor then will indorse the loan conformation and approval sheet to the manager for approval. Managers will do the same screening as what supervisors do. Review the recommendation of the supervisor. 4.0 Pre-disbursement 4.1 Before the disbursement be made there must be a pre-disbursement ceremony held at the office while waiting for the releases. 4.2 It is the supervisor who will conduct the ceremony. The purpose of the ceremony is to remind and refresh borrowers from their obligation, the bank policies, procedures, and their benefits on joining our micro-finance program. 4.3 This is the time also to discuss and entertain their question if they have doubts and confusion on our lending activities and program so that they will have a clearer understanding and idea every time they have re-loan about our policies so easy for them to cooperate. 5.0 Disbursement / Releases 5.1 Supervisor and account officer will notice the cashier for any deduction agreed by the centers such as their penalties on absences and fines for delayed remittance or any other obligation of the borrowers to the center and group. 5.2 Managers and supervisor must make sure all deductions implemented by the program must be deducted to the proceeds such as savings open account and additional deposit every loan.

Audit verification: