Filipino workers can get business loans up to QR 77,000
Overseas Filipino Workers (OFW) living in Qatar can benefit from the Reinstatement Program, which allows them to loan up to QR 77,000 or Php 5 million. This was revealed during a recent financial literacy webinar hosted by the Philippine Embassy in Qatar and the Overseas Filipino Bank (OFBank).
The webinar also revealed that the loan program is for OFWs who want to start or expand their business in the Philippines. The program is a partnership between LANDBANK, a public bank in the Philippines, and the Overseas Workers Welfare Administration (OWWA).
Gerald Heriales, OFBank’s overseas representative in the Middle East region, said the amount loanable depends on the needs of the project or the borrower’s ability to repay the loan. “The minimum amount is Php 100,000; while the maximum amount is Php2m for sole proprietorship and Php5m for partnership, corporation, cooperative,” Heriales noted.
An OFW can lend 80% of the total project cost, while the borrower must pay the remaining 20%. Meanwhile, eligible lending purposes are working capital and acquisition of fixed assets, while the interest rate is set at 7.5% per annum for short-term and term loans.
Short-term loans must be repaid in one year, while term loan repayments are based on cash flow but must not exceed seven years. If the borrower does not repay the loan, a penalty rate of 24% per year applies.
Among the types of businesses an OFW can venture into are any viable projects that generate sufficient cash flow to pay depreciation; with debt service coverage in at least the following areas: franchising, agricultural and non-agricultural production/manufacturing, construction/rental, service/trade, transportation, has contractual ties with the top 1,000 companies.
Heriales also pointed out that any business unrelated to gambling would be accepted.
To be eligible for the Reinstatement Program, an OFW must be an active or inactive certified member of the OWWA who is currently employed overseas or has applied under the program no later than three years after returning to the Philippines, except in cases where the applicant has an ongoing business prior to the time of application. In addition, the candidate must have completed an enhanced Entrepreneurial Development Training (EDT).
In addition, a group of OFWs who have incorporated into a business entity, either a partnership, corporation or cooperative: has at least three years of profitable operations experience, all partners/shareholders are OFWs and certified as members of the OWWA, and have completed the Enhanced EDT Curriculum.
Heriales also discussed collateral or loan security which includes an object of financing, mortgageable assets of the borrower (for example, real estate mortgage, deed of sale of product or market contracts, contractual agreements , etc.) or any guarantee/loan guarantee acceptable to the Bank.
He also explained that once an OFW has submitted all the necessary documents to get the loan, it can take up to a month to be approved. Additionally, he pointed out that those with an existing loan from other banks are eligible to apply, as long as their business is in the Philippines and not overseas.