Revised Guidelines for the Accreditation of Microfinance Non-Government Organizations

December 13, 2018 MICROFINANCE NGO REGULATORY COUNCIL MEMORANDUM CIRCULAR NO. 04-18 REVISED GUIDELINES FOR THE ACCREDITATION OF MICROFINANCE NON-GOVERNMENT ORGANIZATIONS WHEREAS , MNRC Memorandum Circular (MC) No. 1, series of 2018 requires Microfinance NGOs (MF-NGOs) to submit the following in order to be accredited by the Microfinance NGO Regulatory Council (MNRC): SDHTEC a. Latest Certificate of No Derogatory Information (CNDI) issued by the Securities and Exchange Commission (SEC); b. Certificate from the Chairperson of the Board, President and Chief Financial Officer (CFO) or his/her equivalent indicating the adoption of the Standard Chart of Accounts in the submission of 2018 Audited Financial Statements (AFS) and every year thereafter; and c. Results of self-rated assessment of 2017 microfinance operations using the Performance Standards. The downloadable report card template posted at the SEC website shall be used in the self-rated assessment. WHEREAS, Rule 4, Section 2 of the Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 10693, otherwise known as the "Microfinance NGOs Act," requires MF-NGO to file two (2) copies of the documents listed therein for the purpose of securing MNRC Accreditation; HSAcaE WHEREAS, Rule 4, Section 1 of the IRR of RA No. 10693 and MNRC Memorandum Circular No. 1, series of 2017 require MF-NGOs to be established as nonstock, nonprofit corporations with capital contribution of at least One Million Pesos (P1,000,000.00) and include the word "Microfinance" in its corporate and trade names; WHEREAS, Rule 4, Section 6 of the IRR of RA No. 10693 provides that a Certificate of Accreditation shall be valid for three (3) years unless earlier revoked and that MF-NGOs may apply for renewal of accreditation three (3) months before the expiration of accreditation; WHEREAS , the period of transitional accreditation of Microfinance NGOs as provided in the IRR of R.A. No. 10693 had already lapsed; WHEREAS , the Certificates of Accreditation issued in 2018 shall only be valid until 31 March 2019, pursuant to MNRC Memorandum Circular No. 2, series of 2018; WHEREAS , the accredited MF-NGOs shall secure re-accreditation with the Council before 31 March 2019 to prevent gaps in their accreditation, which may result in the non-applicability or interruption in the application of the preferential tax rate provided in the Microfinance NGOs Act; IN VIEW OF THE FOREGOING , the following guidelines shall be observed in the accreditation process starting 2019, which shall be applicable to both new applications and applications for re-accreditation: 1. The Certificate of Accreditation starting 2019 shall be issued upon the submission of the following documents: a. Application Form, to be executed under oath by the President/CEO/Executive Director or other equivalent officer as provided in the General Information Sheet (GIS) (The applicant must use the prescribed form attached hereto as "Annex A"); HESIcT b. National Bureau of Investigation (NBI) Clearance of each Trustee and Officer; c. BIR Certificate of Registration; d. In case of Foreign Trustees/Officers, each one must submit: a clearance from the Bureau of Immigration, photocopy of his/her passport showing a valid visa or stay in the Philippines, Alien Certificate of Registration Identity Card (ACR I-Card); and work permit subject to the exemptions/exclusions provided for the Department of Labor and Employment (DOLE); e. Curriculum Vitae (CV) of trustees and officers; f. Sworn Statement executed by its Chairperson, President and Treasurer, or their respective counterpart as reflected in the GIS, indicating therein a full description of the MF-NGO's activities for the past three (3) years, present activities and proposed activities for the next three (3) years. It shall include the following: AcICHD Profile of its clients or members for the preceding and current year; and List of its main, branch and unit offices. g. Business plan including list of products, projects and programs, method of marketing its products and sources of the funds and maturities of credit; h. Location map indicating the exact address of the principal office, signed by the President and Corporate Secretary; i. Original Certificate of No Derogatory Information (CNDI) issued by the Securities and Exchange Commission (SEC) not more than two (2) months from the filing of the application. Applicants located in jurisdictions covered by SEC Extension Offices (EOs) shall obtain the CNDI from their respective SEC-EOs; caITAC j. Certificate for the adoption of the Standard Chart of Accounts, notarized and signed by the Chairman, President and Treasurer or his/her equivalent as reflected in the GIS (Please use the prescribed form attached hereto as "Annex B"); 1 k. Report Card Template, signed by the Chairman, President and Treasurer or his/her equivalent as reflected in the GIS ; 2 l. Latest Audited Financial Statements (AFS) duly received by the SEC ( i.e. , 2018). In case the 2018 AFS is not yet available at the time of application, the MF-NGO may submit an Interim Financial Statement (IFS) which shall be used in accomplishing the Financial Report Card template, provided that the AFS shall be submitted to the Council no later than 30 May 2019, provided further, that this shall be without prejudice to the applicable penalties for late/non-submission to the SEC pursuant to the laws, rules and regulations being implemented by the said agency; and m. Other documents which the Council may require. 2. Only MF-NGOs with at least three (3) consecutive years of microfinance operations shall be accredited by the Council. As evidence of the 3-year microfinance operations, AFS for the past three (3) years must be submitted together with a microfinance operations report, as well as any other document that will prove compliance with the said requirement. The burden to prove compliance with the 3-year microfinance operations requirement through documentary submissions lies with the applicants. 3. The requirements in MNRC Memorandum Circular No. 2, series of 2017 shall be applicable to applications of a newly registered MF-NGO which is a spin-off of an old one. ICHDca 4. The word "Microfinance" shall appear in the corporate and trade names of the MF-NGO. 5. The Certificate of Accreditation shall be valid for three (3) years unless earlier revoked or suspended by the Council. 6. In view of the expiration of all existing Certificates of Accreditation by 31 March 2019, the Council expects to receive a considerable volume of applications prior to such period. Thus, to ensure processing of applications before the said lapse of accreditation, complete applications (both for new and re-accreditation) must be filed on or before 31 January 2019 . cDHAES Complete submissions may be made through either of the following modes: a. Personal submission at the MNRC Secretariat located at the Corporate Governance and Finance Department (CGFD) of the Securities and Exchange Commission (SEC), Ground Floor, North Wing Hall, Secretariat Building, PICC Complex, Vicente Sotto Street, 1307, Pasay City; or b. Registered Mail/Courier, addressed to: Microfinance NGO Regulatory Council (MNRC)-Secretariat Corporate Governance and Finance Department Securities and Exchange Commission Ground Floor, North Wing Hall, Secretariat Building PICC Complex, Vicente Sotto St. 1307 Pasay City If submitted through registered mail/courier, kindly send scanned copies of the complete set of documents and proof of transmittal, i.e. , receipt and tracking number to [emailprotected] . TCAScE The foregoing application requirements shall be without prejudice to other regulatory requirements applicable to MF-NGOs as provided in Memorandum Circulars and other issuances of the Council. This Circular shall take effect fifteen (15) days after its publication in two (2) national newspaper of general circulation. December 13, 2018, Pasay City. (SGD.) EMILIO B. AQUINO Chairperson ANNEX A Sworn Application Form for MNRC Accreditation ANNEX B Certificate of Adoption of Standard Chart of Accounts Footnotes 1. Forms are available at http://www.sec.gov.ph/microfinance-ngo-regulatory-council/forms/ . 2. Forms are available at http://www.sec.gov.ph/microfinance-ngo-regulatory-council/forms/ .