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HOLY CHILD COLLEGE OF INFORMATION TECHNOLOGY, INC

Allah Valley Drive, Surallah, South Cotabato

In
Partial Fulfillment
Of the Requirements
In (Mgt. 3)
MICROFINANCE

March 23, 2019

Submitted to:
JOEL SARILLO

Submitted by:
ALVIN CRIS DECHAVES
ACD Savings and Credit Cooperative

LOCATION

It’s headquarter is located in Zone 2, Barangay Libertad, Surallah, South Cotabato.

Vision

Our long-term vision is to become an ACD Savings and Credit Cooperative a

competitive, viable and sustainable with capacity for fulfilling members’ economic and

social needs.

Mission

To be a strong, member-only financial cooperative providing innovative financial

services and products while increasing the community’s savings, providing loans and

offering services to support our members and their communities in poverty alleviation

efforts.

Core Values

With integrity, respect (equality, dignity), excellence (highest standards), flexibility

(interactive); safety and security (protect your funds and personal information).

Description

This business plan was established using a participatory process that involved

executives, Board members, supervisory committee members and village leaders.

Initially, an internal scan helped to assess the adequacy and completeness of systems

and procedures; to identify the operational challenges facing ACD Savings and Credit
Cooperative the; to give recommendations; and to establish the ACD Savings and Credit

Cooperative financial position. The internal scan reviewed all operational areas including

performance management and accounting, governance and administration, Back Office

Savings Activities (BOSA) and internal audit.

To be able the project be implemented the project will ensure first the papers and basic

documentary requirements as provided in RA 9474 also known as Lending Company

Regulation Act of 2007 an Act Governing the Establishment, Operation and Regulation

of Lending Companies. To name those documents and requirements, the project will

establish as corporation, with a minimum paid-in capital of One Million Pesos

(P1,000,000.00) and secure a license to operate from Securities and Exchange

Commission (SEC), other documentary requirements shall secure from the Municipality

where the business will be located. The business will grant loan to the borrowers with a

reasonable interest rate of 2% per month. The company will also deduct an advance one

(1) month interest from the proceeds of loan as well as the other fees. The loan must be

payable within one (1) month up to six (6) months term base on the amount borrowed

and the agreement between the borrower and the company. Since the target market of

the project will be the employees of LGUs, other offices and Schools and also the

pensioners, the proponent will propose to have a Memorandum of Agreement (MOA)

between the lending company and their respective employers to deduct a corresponding

amount from their monthly salary and remit the same to the lending company. This will

ensure the smooth collection of loans. On the other hand, on the part of the pensioners

they will surrender their Passbooks, or ATMs to the company as collateral since this is

the only way to protect and as assurance to pay their lent amount. And for some
instances, for the convenient collection of matured loans, the company will propose to the

bank where the monthly pensions of pensioners are remitted in the area to debit the

account of the pensioners with matured loan once their pensions credited to their

respective accounts and credit the same to the account of the company. Since, the

company will open a bank account preferably checking account for easy releasing of

loans. As one of the requirements to avail a loan from the company, borrower must have

a co-maker and it must be his/her officemate. To ensure that whenever the borrower fails

to settle his/her obligation, the co-maker will be liable for that obligation. The company

will provide a promissory note stating the amount of loan, the interest rate, the term of

loan, other fees and other terms and conditions and this will be signed by both the

representatives of the company and the borrower same as with his/her co-maker. This is

PROJECT EQUIPMENTS

Every business cannot operate without equipment’s in the workplace. The proposed

equipment’s to be acquired before the project be implemented are the following:

1. Two (3) sets of computer

2. Two (3) units of printer

3. One (1) unit of telephone/fax machine

4. One (2) unit of typewriter

5. Three (5) calculators

The owners will canvass those equipment’s to qualified suppliers. Setting a

parameters to get a lowest price with good standard will observe by the owners. The

project will prioritize the supplier who have a better offer. These equipment’s will be used
by the employees of the business to ensure the smooth operation of the business. The

proponent suggested to have 3 sets of computer, one (1) for the manager and the other

two(2) is to be used by his/her staff or co-employees same as the printer for preparing

and printing the reports. The company must have of at least one (1) unit of telephone/fax

machine for the queries of the prospective clients and for follow-upping other business

related concerns. Two (2) unit of typewriter for preparing cash vouchers, promissory

notes, checks and other documents. And of course calculators to be used for computation

of interest and other related mathematical matters. Since the office space is completely

furnished. The proponent will also propose to have the following furnitures and fixtures.

Proper canvassing as what had observe in purchasing office equipments will also follow.

Three (3) sets of office tables Three (3) roving chairs three (3) sets of waiting chairs for

clients Two (2) electric fans, 1 aircon.

ORGANIZATIONS AND MANAGEMENT ASPECTS

ORGANIZATIONAL STRUCTURE

The business will employ employees in the office, the cashier, clerk, bookkeeper and

operations head or manager. Duties and responsibilities of each employees are stated

below:

Loans Clerk

– responsible in releasing and accepting payments of loans.

- Prepares cheques, vouchers, promissory notes to be issued to borrowers.

- Prepares Official Receipts (ORs) when the borrowers pay their due amount.

- Update the ledger of each borrowers.


- Make a bank reconciliation.

- Handles petty cash in the company for petty expenses.

Loans Supervisor

– act as supervisor/bookkeeper.

- Checks the works of cashier (cheques, vouchers, ORs, promissory notes & etc.)

- Handles and prepares the General Ledger/Subsidiary Ledger of the business

- In charge of closely monitoring collections of delinquent loans.

Manager/Operations Head

– over-all in-charge in the lending operations

- Approve the loan application and vouchers.

- Analyze borrower’s financial & credit status to determine weather the loans will be

granted or denied.

- Responsible in overseeing the performance in processing loans documents.

- Prepares and analyzes variance on budget vs actual.

- Understands, manages and supervises all aspects of cash flow, such as but not limited

to:

a. Ensures all collections are deposited and accounted for.

b. Ensures all disbursements are approved by authorized personnel before

processing.

c. Prepares cash flow projections.


PROFILES AND QUALIFICATIONS

For Loans Clerk Graduate of any business related course Proficient in MS Office With

good communication skills Entry-Level .

For Loans Supervisor Graduate of Accounting or equivalent Knowledgeable in

bookkeeping With 1-2 years experience in related field. Proficient in MS Office With Good

communication skills

For Manager/Operations Head Graduate of any business related course Not more

than 45 years of age With 2-3 years experience in microlending Must be Computer

Literate

FINANCIAL ASPECTS

A. CAPITAL CONTRIBUTION

The study shows that in order to establish a lending company in Surallah, South

Cotabato. The project must have of at least P1,000,000.00 paid-in capital. The proponent

will propose to have P2,000,000.00 paid-in capital twice of the minimum paid-in capital,

due to greater demand of the project. The capital will be from the eleven (11) private

individuals whether they are retired employees or employed but does not affect/influence

the interest of both the business and the company where they employed. They will

contribute as to how much investment they want to raise the projected paid-in capital.

B. BASIC ASSUMPTION

The proponent will assume that the 273 present demand will all avail loans within the year

from the business amounting to P 25,000.00 each with an interest rate of 3% for 3 months

term. On the other hand, the proponent will project 3uncollectible accounts, this will be

the basis to be used in projecting loans receivables & the one-percent (1%) provision for
bad debts. As well as the 2.5%penalties will be imposed for late payments and the

proponent will assume that 5 borrowers may fail their outstanding obligation on the

specified term. The company will also open a bank account and assumed to earn a 1%

interest on deposit. For the purpose of preparing Financial Statements the proponent will

assume that the project will start its first year of operation on the first day of January2014.

Other related matters will be based on the current trend such as utilities (electricity &

water expenses).

FINANCIAL ANALYSIS

A. OPERATING EXPENSES

The projected monthly operating expenses of the project will be as follows:

Rent Expense P 2,500.00

Water Expense 467.50

Electricity 500.00

Telephone Expense 400.00

TOTAL P 3,867.50

B. SCHEDULE OF SALARIES

To attract qualified employees to fit the position. The company will offer an above

minimum wage. The salaries of each employees are as follows depending on the postion

they will handle.

POSITIONS MONTHLY SALARIES (PHP)

Loans Clerk 7,600.00

Loans Supervisor 9,000.00

Manager/Operations Head 12,400.00


C. SCHEDULE OF FRINGE BENEFITS

All employees will receive a mid-year bonus equivalent to their one (1) month

salaries. A Christmas bonus base on the company’s performance. Thirteenth month pay

will be given also as provided by our labor code. Aside from fringe benefits mentioned

above the company will also give a yearly medicine allowance of P1,200.00 for each

employees. Other benefits as provided by our Labor Code will be given also.
PROJECTED INCOME STATEMENT

ACD Savings and Credit Cooperative


PROJECTED INCOME STATEMENT

For the Year Ended December 31, 2019

INCOME

Interest Income P 569,250.00

Late Fees 3,125.00

Other Income (Interest on Deposit) 16,000.00

Total Income P 588,375.00

Less: EXPENSES

Salaries P 348,000.00

Fringe Benefits 61,600.00

Supplies Expense 12,000.00

Power, Light & Water 15,210.00

Rent Expense 30,000.00

Telephone Expense 3,000.00

PHIC, SSS & Pag-ibig Dues 36,351.60

Permits & Licenses 24,436.00

Provision for Bad Debts (1%) 12,250.00

Total Expense P 542,847.60

Net Income Before Income Tax 45,527.40

Provison for income Tax 28,462.50

Net Income After Income Tax P 17,064.90


PROJECTED BALANCE SHEET

ACD Savings and Credit Cooperative


PROJECTED BALANCE SHEET

As of December 31, 2019

ASSETS

Cash in Bank P 705,012.40

Loans Receivables P 1,225,000.00

Less: Allowance for Bad Debts 12,250.00 1,212,750.00

Interest Receivables 2,250.00

Unused Supplies 6,000.00

Office Equipments 78,000.00

Furniture and Fixture 34,320.00

Total Assets P 2,038,332.40

LIABILITIES

Accounts Payable P 2,500.00

Accrued Other Expenses Payable 1,517.50

Unearned Interest Income 17,250.00

Total Liabilities P 21,267.50

STOCK HOLDERS EQUITY

Retained Earnings P 17,064.90

Common stock 2,000,000.00

Total Stockholders Equity P 2,017,064.90

Total Liabilities & Stockholders Equity P 2,038,332.40


CONCLUSIONS AND RECOMMENDATIONS

Establishing of Lending Business in Surallah, South Cotabato appears to be feasible on

its first year of operation. As per the interviews and questions conducted by the proponent,

having a lending company in the area will assist the needs of certain individuals for their

financial shortcomings. Therefore, I conclude as per the data gathered and based on the

results, it shows that the project will help and assist the financial needs of different

individuals and in return it will give an income to the company. I also conclude that with

this, it will minimize and later on eliminate the traditional lending from underground

lenders that offer a short-time lending like Bombay ( 5-6). On the other hand, I recommend

that this project be implemented. And research supports that with the 65% increase for

the future demand, this industry will continue to grow for the following years.

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