What is the Livelihood Credit Assistance Program?
LCAP is the primary credit facility of the NLDC intended to augment the income of poor farmers and beneficiaries of the Land Reform Program (RA 6657)
Who can avail of LCAP?
a) Small farmer beneficiaries and/or their wives and dependents in the agrarian reform communities (ARCs)
b) Non-farmer and marginalized households, including rural workers, youth, and microentrepreneurs, in the ARCs and KALAHI zones
If one is not an agrarian reform beneficiary, can he/she avail of the LCAP?
Yes, as long as the prospective client can meet the requirements of the MFI. NLDC also maintains a lending program for overseas Filipino workers and their dependents.
Since ARCs are located in the provinces, NLDC currently has limited capacity to serve borrowers based in Metro Manila.
Can a client go directly to NLDC to apply for and secure a loan?
No. Since NLDC funds are coursed through its accredited MFI partners, all loan applications are submitted, processed, and approved by the MFIs. To know if there is an NLDC-accredited MFI in your area, please contact the NLDC office.
How much amount can a client avail of?
Loan amount depends on the need and capacity of a borrower as evaluated by the MFI partner. It can start from as low as P1,000 gradually increasing per loan cycle up to P50,000.
Borrowers who would require a higher amount may access other services of the MFI subject to the latter's assessment.
What are the requirements to obtain the LCAP?
Most MFIs require, though not limited to, the following
1) Fill-out proper application form (to be secured from the MFI)
2) Barangay certificate
3) Simple business plan (for start-up clients)
4) Should pass credit and background check
5) Prospective borrower/client should attend program orientation, social preparation, and value formation training
Does LCAP require collateral?
No, the Program does not require collateral. In many cases, loans are secured by group accountability agreement among borrowers (e.g. Grameen method) or promissory notes.
Does one need to have an existing business before he/she can avail of LCAP?
Some MFIs prefer borrowers with existing businesses but they will cater to start-up clients provided they have the proper attitude and capacity and will use the loan for an income generating project such as vending, food processing, eateries, and other viable enterprises.
What are the payment terms and interest rates of the loan?
MFIs have different loan repayment schemes depending on the capacity and nature of business of a borrower. Loans may be payable on a daily, weekly, or monthly basis for a period of six months. MFIs also maintain varying interest rates to cover different costs and operational expenses. These rates usually range from 24% to 36% per annum.
What other support does NLDC provide to borrowers?
NLDC provides livelihood enhancement trainings and other development assistance to enable borrowers to raise income levels and to be sustainable. MFIs offer savings, insurance, and emergency loans to clients.