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PROPOSAL

Congrous- Regular Loan

Objective: To accommodate member who has insufficient capital to avail loan exceeding the
thrice of his share capital but not more than P200,000.00.

Comparison of Loan offered by Land Bank and SVIS Credeco

Land Bank SVIS Credeco


Types of Loan MLS e-Regular

Loanable Amount 150,000.00 150,000.00


Less: Deductions
Credit Life Insurance Premium 2,924.48 5,900.00
System Fee/Service Fee 800.00 3,000.00
Notarial Fee - 100.00
Total 3,724.48 9,000.00
Net Loan Proceeds 146,275.52 141,000.00

Interest Rate 10% 6%


Term of payment 3 years 3 years

Repayment (Total Payment) 185,832.47 168,000.00


Less: Principal Loan 150,000.00 150,000.00

Interest for 3 years 35,832.47 18,000.00


Deductions 3,724.48 9,000.00
Total Interest and Deductions 39,556.95 27,000.00

Effective Interest Rate for 3 years 27% 19%


(effective interest rate is computed by dividing the total interest and deduction to net proceeds)
Analysis:
It is crystal clear from the above comparison that SVIS Credeco is offering lower interest rate
than Land Bank although the loan proceeds is lower by P5,000. Moreover, aside from the lower
interest rate, member is also entitled to patronage refund, dividends, hospitalization benefit and
christmass gift depending on the amount of share capital.

Problem encountered:
Despite that the cooperative is offering lower interest rate other members still availed the loan
services of Land Bank. The sole reason is that other members are not capable to avail 150,000 to
200,000 loan unlike in Land Bank because their share capital is not sufficient or qualified.

Possible Remedy:
To addres the matter, Congrous Regular loan is developed wherein the Cooperative allows
member to avail loan more than of his share capital but not exceeding P200,000 provided that he
contributed an amount to make his share capital equal to 60,000 or more. The additional share
capital should be deducted to the loan proceeds.
Conditions:
The following requisites must be met in oder to avail the Congrous - Regular Loan:
1. The applicant is a member in good standing;
2. The applicant must be in the government service for atleast 6 months;
3. The applicant is required to contribute an amount to make his/her capital equal to
60,000 or more. The said amount shall automatically be deducted from the Loan
proceeds;
4. The applicant must have sufficient net take home pay since the amortization should
be collected through salary deduction;

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