HEROES livelihood loan assistance a definite must for OFWs

Published May 23, 2022, 12:05 AM

by Jun Concepcion

OFW FORUM

Jun Concepcion

Most returning Filipinos dream of setting up and operating their own business or livelihood project when they go home for good to their loved ones in the country.

The desire is understandable. Though their salary abroad is often double, triple and even quadruple than what they used to earn in the country, many are often unable to build up substantial savings because more often than not, they are asked by their immediate family members and extended kin for help on a wide array of seemingly never-ending financial needs ranging from important items like defraying hospitalization costs up to mundane items including birthday celebrations, weddings, fiestas and other family gatherings.

Because they often play the role of head of an extended family or clan, many OFWs often grapple with an uphill battle to save and build up savings even if they recognize the need to do so. As a result, not many succeed to build up adequate savings for use as start-up capital for whatever small business they wish to set up in their hometown.

This is where Small Business Corporation’s (SB Corp) Helping the Economy Recover thru OFW Enterprise Start-ups (HEROES) lending program comes very handy.

Why should repatriated OFWs due to Covid-induced job loss and those with definite plans to come home for good avail of SB Corp’s loan offer?

It’s because of the following compelling reasons:

1] Its livelihood loan carries zero interest
This marks the first time for any government agency to offer interest-free livelihood loans.

2] It provides a built-in 12-month grace period
This is very significant because it gives the borrower the option not to repay anything during the first 12 months of the 36-month loan as repayment can start on the 13th month.

3] Borrowers many of whom are likely first-time entrepreneurs are provided with excellent online preparation on how to set up and operate a business, as well as mentoring which is vital trouble shooting at the start of operations.

While a HEROES livelihood loan is capped or limited to a maximum of P100,000 for every OFW borrower, the amount is helpful and useful, especially when combined with one’s accumulated savings.
No other government reintegration program offers interest-free livelihood loans and it is therefore very important for returning OFWs, or those who have already gone home following Covid-instigated job loss overseas to avail of this rare and excellent loan assistance.

Qualifying for this highly-innovative lending program is not as difficult and as stringent as the reintegration livelihood lending scheme being administered by government-owned Land Bank of the Philippines (LBP) in conjunction with the Overseas Workers Welfare Administration. OFWs who wish to avail of LBP-OWWA administered livelihood loans need to show a three-year profit track record of an ongoing business, as well as collateral usually in the form of title to real estate. Since most OFWs are not operating any business back home while at work abroad, they automatically fail to meet LBP’s profit track record requirement.

In sharp contrast and to SB Corp’s credit, it doesn’t require any collateral and profit track record of any ongoing business. All it needs is for loan applicants to attend an online whole-day entrepreneurship seminar organized by a unit of the Department of Trade and Industry.

Aside from attending this whole-day entrepreneurship seminar, which is extremely helpful, loan applicants are required to prepare a business plan, which describes the business that will be set up. It will then be followed by a one-on-one session with a mentor who is likely an entrepreneur with a track record of operating his or her own business and who is likely to provide lots of useful advice to a first-time business owner and operator.

SBC Corp’s livelihood loan is payable over 36 months, but repayment is much easier than most loans. The borrower has the option to start repayment on the 13th month of the 36-month loan tenor. This concession is very helpful since a newly-established business often takes from six to 12 months before it starts generating sufficient revenue and achieve a position when it is strong enough financially to repay a start-up loan and sustain its day-to-day operations.

Most lending programs, including the LBP-OWWA administered reintegration loan program, don’t provide this great leeway as they treat all borrowers as private companies which don’t need special concessions and considerations.

In this respect, all returning OFWs and those who have already returned to the country following Covid-instigated job loss should seriously consider availing of SB Corp’s lending assistance because it’s definitely one-of-a-kind.

Most banks are very strict when lending to borrowers who intend to use the loan proceeds to put up and operate a business. So OFWs who are really dedicated to setting up and operating a business should lose no time in reaching out to SB Corp via their website or Facebook account to avail of its excellent livelihood lending assistance.

Contact this writer at [email protected]

 
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