Quedancor to administer livelihood funds

The Quedan and Rural Credit Guarantee Corp., credit arm of the Department of Agriculture, has been assigned fund administrator of the P15.7 million revenues raised from the recent golf tournament of the Philippine Business for Social Progress at the Manila Polo Club. President Arroyo led the ceremonial tee off to open the tournament.

The fund will be used to finance livelihood and employment generating activities in the country in line with the One Million Jobs in Agriculture program of President Arroyo headed by Presidential Adviser Luis Lorenzo Jr.

Quedancor will be lending out this funds to small entrepreneurs whose businesses are expected to create jobs and other poverty alleviation endeavors.

In a short address at the closing of the tournament last Thursday, Lorenzo explained that livelihood loans of up to P15,000 per borrower will be given to applicants, which Quedancor will screen and train on values and managing businesses.

"After a year of full repayment and given the good track record and viability of the applicant’s project, the applicant can be entitled to a lifeline or emergency loan from Quedancor for expenses needed by his family or business," Lorenzo said.

Livelihood program and microfinance loans extended by Quedancor carry an interest of 1.75 percent per month plus a one-time upfront service fee of 2.5 percent, explained Quedancor president and CEO Nelson C. Buenaflor.

Using the self-reliant team (or the Buenaflor model) in extending loans for group livelihood activities, the applicants – during the training period – are asked to select a leader, who shall collect payments of members’ loans and for which the leader gets incentives.

Buenaflor said the lifeline extended by Quedancor to good payers is similar to the emergency loans that small borrowers get from usurers or the 5/6. These are borrowings on top of existing loans balances with Quedancor. But unlike the emergency loans of usurers, the loans extended under Quedancor’s lifeline is not given to the borrower in cash but through a purchase of payment order that Quedancor itself pays for.

"This way we are completely sure that the borrower does not use the funds for other activities not stipulated in the application for a lifeline," he said.