In compliance with Republic Act No. 11494 or the Bayanihan to Recover as One Act, which became effective on September 15, 2020, microfinance institutions (MFIs) under the umbrella of the Microfinance Council of the Philippines, Inc. (MCPI) and the Alliance of Philippine Partners in Enterprise Development (APPEND), Inc. shall be implementing the mandatory one-time 60-day grace period to all loans that are existing, current, and outstanding falling due, or any part thereof, on or before 31 December 2020.
The mandatory one-time 60-day grace period shall apply only to loans that are existing, current and outstanding upon the effectivity of the Bayanihan to Recover as One Act which is on September 15, 2020. Only loans in current status and not past due are covered under the Act. Existing loans shall refer to loans granted prior to the effectivity of the Act.
Microfinance institutions will not apply interest on interest, penalties, fees or other charges during the mandatory one-time 60-day grace period to future payments/amortization of clients. However, MFIs may charge accrued interest that will be payable after the application of the Bayanihan to Recover as One Act grace period.
Clients and their MFIs may also agree to a grace period longer than 60 days, and/or payment of accrued interest on staggered basis beyond December 31, 2020.
During the grace period, MFIs will continue accepting voluntary payments of loans and savings from clients that are willing and have the capacity to pay their amortizations, thus loan releases and other community development services will be continuous for those who pay voluntarily.
The Microfinance Council of the Philippines, Inc. (MCPI) is the national network of microfinance institutions (MFIs) and support organizations in the Philippines advocating a sustainable, innovative, and client-responsive solutions to poverty in the country. MCPI is currently comprised of 64 members (52 MFIs, 2 regional networks, and 10 support organisations) which account for 90% of the microfinance industry in the Philippines.
APPEND Inc. is a non-stock, charitable, educational, social welfare development and civic service organization. It is the first network of microfinance non-government organizations in the Philippines. APPEND facilitates the growth and viability of its member organizations and the continuing development of its individual members through social enterprise development, microfinance, microhealth, agriculture value chains, leadership training, financial literacy, advocacy and legislation and environment protection.