Guidelines for the Accreditation of Microfinance NGOs for the Period 2022 to 2025

November 24, 2021 SEC-MNRC MEMORANDUM CIRCULAR NO. 2, S. 2021 GUIDELINES FOR THE ACCREDITATION OF MICROFINANCE NGOS FOR THE PERIOD 2022 TO 2025 WHEREAS , Republic Act ["R.A."] No. 10693, otherwise known as the Microfinance NGOs Act , recognizes the indispensable role of non-government organizations ["NGOs"] in the provision of microfinance services to microenterprises, among others, and provides the legal framework for its effective and sustainable operations. WHEREAS , the Microfinance NGO Regulatory Council (MNRC or Council) was established under the Microfinance NGOs Act as the accrediting body for microfinance NGOs ["MF-NGOs"] with the following functions and responsibilities: (a) institute and operationalize a system of accreditation for MF-NGOs. The criteria for accreditation shall include sound and measurable standards of financial performance, social performance and governance, pursuant to Sections 12 to 16 of the Microfinance NGOs Act; (b) issue certificate of accreditation as an MF-NGO upon determination that the criteria have been fully satisfied; (c) monitor the performance of accredited MF-NGOs to ensure continuing compliance with the Microfinance NGOs Act and its implementing rules and regulations (IRR); (d) place under probation, suspend or revoke any certificate of accreditation upon due determination that an MF-NGO no longer meets the criteria for accreditation; and (e) require regular submission of reports by accredited MF-NGOs. WHEREAS , the set of parameters that shall be used to assess the financial performance, social performance and good governance of MF-NGOs 1 is defined under Sections 14 to 16 of the Microfinance NGOs Act and Rule 4, Section 3 of its IRR, including, but not limited to, the following: (1) Financial Performance Standards portfolio quality, efficiency, sustainability and outreach (PESO); (2) Social Performance Standards social objectives, governance and accountability mechanisms, transparency, product design, services and delivery channels, and ethical treatment of clients; and (3) Governance Standards fairness, management responsibility, respect for rights, corporate integrity, loyalty, compliance with regulations and transparency. WHEREAS , in addition to the Microfinance NGOs Act, MF-NGOs are also enjoined to comply with all applicable laws, including, but not limited to, R.A. No. 3765 (Truth in Lending Act) , R.A. No. 8799, as amended (Securities Regulation Code) , R.A. No. 9150 (Credit Information System Act) , R.A. No. 10173 (Data Privacy Act of 2012) and R.A. No. 11232 (Revised Corporation Code of the Philippines) , their IRR and any amendments thereto (if any). WHEREAS , it is one of the Council's main objectives to uphold excellent microfinance principles and policies in the Philippines in line with international standards, e.g. , International Labour Organization, Consultative Group to Assist the Poor (CGAP), World Bank and the relevant UN bodies, etc., through the establishment and upkeep of relevant microfinance rules and regulations to be adhered to by MF-NGOs applying for accreditation and are accredited under the Microfinance NGOs Act. In addition, MNRC encourages MF-NGOs to subscribe and implement, wherever applicable, sound practices and methodologies employed by credentialed private sector microfinance institutions around the world. WHEREAS , Rule 4, Section 6 of the IRR of the Microfinance NGOs Act provides that the certificate of accreditation shall be valid for three (3) years from the date of its issuance, unless earlier revoked by the Council for good cause after review. Three (3) months before the expiration of its accreditation, the MF-NGO may renew its accreditation for the succeeding three (3) years. The process for initial application of accreditation shall be the same for its renewal. WHEREAS , the accredited MF-NGOs with MNRC Certificates of Accreditation issued on or before 31 March 2019 shall secure re-accreditation with the Council on or before 31 March 2022 to prevent gaps in their accreditation, which may result in the non-applicability or interruption of the application of the preferential tax rate granted in the Microfinance NGOs Act. NOW THEREFORE , the following shall be observed in the accreditation of MF-NGOs for the period 2022 to 2025, which shall be applicable to both new applications and applications for re-accreditation: SECTION 1. Definition of Terms . (a) Active Microfinance Clients Clients with outstanding micro savings and/or micro loans. (b) Adjusted Expense The formula for this account shall be as follows: Adjusted Expenses = Total Operating Expense + [(Average Equity Average Fixed Assets) x Inflation Rate] + [(Market Interest Rate x Average Total Liabilities) Actual Interest Expense] + Other Implicit Costs (c) Administrative Expense (Shared Cost) 2 This includes Salaries and Wages, Employees' Benefits, SSS, Pag-IBIG, PhilHealth Premium Contribution, Transportation and Other Travel Expenses, Stationeries and Office Supplies, Communication and Postage, Phone Bill, Publication, Printing, Subscription and Membership Dues, and Representation Expenses. (d) Audited Financial Statement (AFS) A complete set of financial statements comprising: (i) a statement of financial position as at the end of the period; (ii) a statement of profit or loss and other comprehensive income for the period; (iii) a statement of changes in equity for the period; (iv) a statement of cash flows for the period; (v) notes, comprising significant accounting policies and other explanatory information. (e) Client-Member Any member of the MF-NGO who is also a client thereof. He/she must be a client of the MF-NGO for at least three (3) consecutive years and has good standing with the MF-NGO. Under the Template Manual on Good Governance for MF-NGO, 3 MF-NGOs are highly encouraged to provide their own definition of the term in accordance with their practice or operation. (f) Complete Filing of Application The complete filing of application for accreditation before the Council shall be determined by the MNRC Secretariat, after careful evaluation and proper notice to the applicant. (g) Foreign Trustee/Officer For purposes of this Memorandum Circular (M.C.), he/she is an elected trustee or officer of an MF-NGO who is not a Philippine national or resident of the Philippines. (h) Interim Financial Statement (IFS) A complete or condensed set of financial statements for a period shorter than a financial year. The minimum content is a set of condensed financial statements for the current period and comparative prior period information, i.e. , statement of financial position, statement of comprehensive income, statement of cash flows, statement of changes in equity and selected explanatory notes. (i) Key Management Officers These include the president, treasurer, corporate secretary, compliance officers and those indicated in the by-laws. (j) Large MF-NGO For purposes of the MNRC Good Governance Standards, it is an MF-NGO that has a total microfinance loan portfolio of more than P600 million. (k) Loan Portfolio (Total) The outstanding balance of loans granted to clients. (l) Low-income the income of individuals or families that fall below the low-income threshold, which is defined by the National Economic and Development Authority (NEDA) as twice the official national poverty threshold. The above definition shall be subject to periodic review by NEDA. (m) Management Information System (MIS) An information or data-processing system designed to support the activities of an MF-NGO for regular monitoring of microfinance operations as evidenced by the existence of a loan tracking system, and the timely generation of basic financial data and aging reports using Portfolio at Risk (PAR). (n) Microfinance Loan Small loans granted to the basic sectors, as defined in R.A. No. 8425, otherwise known as the Social Reform and Poverty Alleviation Act , and other loans as defined by the government, as to their amount, scope, and coverage, that are granted to the poor and low income individuals for their microenterprises and small businesses, so as to enable them to raise their income levels and improve their living standards. Microfinance loans are granted on the basis of the borrower's cash flow and are typically unsecured. The total cumulative amount of the outstanding microfinance loan per borrower must not exceed P300,000.00 at any given point in time. (o) Microfinance Loan Portfolio (Total) The outstanding balance of microfinance loans granted to clients. (p) Microsavings (Total) The program of an MF-NGO to collect relatively small amounts of money from its clients for purposes of maintaining a compensating balance. It shall also refer to equity build-up or capital build-up. (q) Net Lender An MF-NGO is a net lender when the ratio of its total loan portfolio to total microsavings is greater than one (1), or where the total amount of microfinance loans outstanding is greater than the total amount of microsavings collected from clients, at any point in time. (r) Operating Costs 4 All expenses incurred by the branch offices plus seventy percent (70%) of the total costs incurred by the head office on the following expense items: Personnel Related Cost (Salaries and Wages, Employees' Benefits, SSS, Pag-IBIG, PhilHealth Premium Contribution, and Post-employment Benefit Expenses); Transportation and Other Travel Expenses; Stationeries, Rent, Utilities (Power, Light and Water), Communication and Postage; Meetings; Taxes and Licenses; Gross Receipts Tax; Repairs and Maintenance; Insurance Expenses; Information Technology Expenses; Depreciation and Amortization; General Support Service; Client Community Services, Representation Expenses; and Miscellaneous. (s) Other Implicit Costs These include those costs relevant to the conduct of the MF-NGO's business such as grants, rent-free building, donor-paid technical advisor, or other subsidized expenses. (t) Re-accreditation MF-NGOs accredited for the period 2019 to 2022 may apply for re-accreditation for the period 2022 to 2025. (u) Small MF-NGO For purposes of the MNRC Good Governance Standards, it is an MF-NGO that has a total microfinance loan portfolio of P600 million and below. SECTION 2. Form of Organization . To be accredited, the MF-NGO must: (a) Be established as a non-stock, non-profit corporation with a minimum fund balance 5 of at least One Million Pesos (P1,000,000.00) upon application. (b) Include the word "Microfinance" 6 in its corporate and trade names, as written in its Articles of Incorporation ["AOI"] and By-Laws ["BL"]. (c) State in its AOI the following: (1) It is a "non-stock, non-profit"; (2) It has the primary purpose of implementing a microenterprise development strategy and providing microfinance programs, products and services for the poor; (3) Upon dissolution, the net assets of the MF-NGO shall be distributed to another NGO organized for a similar purpose, or the State for public purpose/s, or as may be determined by a competent court of justice; (4) No part of the property or income shall inure to the benefit of any member, officer, organizer or any individual person; (5) The trustees shall not receive any compensation or remuneration; (6) The level of administrative expenses shall not exceed thirty percent (30%) of the total expenses for the taxable year; and (7) Other requirements which the Council may deem necessary. (d) Provide the basic minimum core programs and services of MF-NGOs under Section 5 of the Microfinance NGOs Act. (e) Have at least three (3) consecutive years of microfinance operations immediately before applying for accreditation or re-accreditation. SECTION 3. General Requirements . The general requirements for accreditation of an MF-NGO are the following: (a) Manual of operations or product manual; (b) Presence of program objective/s to reach the poor; (c) Presence of a functioning and effective MIS; (d) At least two thousand five hundred (2,500) active microfinance clients ( i.e. , total of individual and group lending). The number of active microfinance clients should be disaggregated by sex; (e) At least two (2) full-time account officers for microfinance operations; (f) It must always be a net lender; and (g) Total microfinance loans shall comprise at least sixty-five percent (65%) of the total assets of an MF-NGO. SECTION 4. MNRC Performance Standards . The Performance Standards for Accreditation of MF-NGOs ["MNRC Performance Standards"] (attached hereto as Annex "A" and made an integral part of this M.C.) shall be used to accredit MF-NGOs and assess compliance of accredited MF-NGOs with the Microfinance NGOs Act for the period 2022 to 2025. The relevant information in the AFS, applicable IFS and operational reports of the MF-NGO shall be used as basis in the computation of ratios and indicators embodied in the MNRC Performance Standards. Existing policies and procedures of the MF-NGO shall also be used as basis to determine compliance to the standards. The results of the self-rated assessment of the MF-NGO's operations using the MNRC Performance Standards must indicate compliance to the following: (a) Rating of fifty percent (50%) or higher in each of the following set of indicators: financial performance, social performance and governance; and (b) Weighted average rating of sixty percent (60%) or higher of the financial performance, social performance and governance indicators. The MNRC Performance Standards shall be subject to the review of the Council at least once every three (3) years in collaboration with concerned stakeholders. SECTION 5. Documentary Requirements . Upon effectivity of this M.C., the application for accreditation shall be deemed completely filed with MNRC upon the submission of the following documents: NEW APPLICATION APPLICATION FOR RE-ACCREDITATION (a) Sworn application (The MF-NGO must fill-out the Google Form provided in the MNRC Website Corner) certified by the President/CEO/Executive Director and Treasurer/CFO/Finance Director 7 (b) Bureau of Internal Revenue (BIR) Certificate of Registration (c) Certificate of No Derogatory Information (CNDI) issued by the Securities and Exchange Commission (SEC) 8 for not more than six (6) months from complete filing of the application with MNRC (d) Duly accomplished MNRC Performance Standards Report Card 9 using the latest prescribed template, signed by the Chairperson, President/CEO/Executive Director and Treasurer/CFO/Finance Director 10 (The link to the template is available at the MNRC Website Corner) (e) Latest AFS for the immediately preceding year duly received by SEC. In case said AFS is not yet available at the time of application, the MF-NGO shall submit an IFS signed by the President/CEO/Executive Director and Treasurer/CFO/Finance Director 11 for the subject year, which shall be used in accomplishing the Financial Performance Report Card. An illustration of the required financial statement/s to be submitted depending on the date of filing is as follows: Date of Filing Required Financial Statement January 1-March 31 IFS as of December 31 of previous year April 1-June 30 AFS of previous year July 1-September 30 AFS of previous year + 1Q of current year October 1-December 31 AFS of previous year + 2Q of current year (This must be duly stamped and received by SEC.) (f) National Bureau of Investigation (NBI) Clearance of each trustee and officer or equivalent document for trustee/officer 12 (1 per trustee and officer) (g) In case of foreign trustees/officers, MF-NGO must also submit a/an: (1) Clearance from the Bureau of Immigration (BI); (2) Passport with valid visa or stay in the Philippines; (3) Alien Certificate of Registration Identity Card (ACR I-Card); and (4) Work permit issued by the Department of Labor and Employment (DOLE). 13 (h) Latest Curriculum Vitae (CV) of all trustees and officers using the prescribed template 14 (i) Complete and timely submission of annual reports under MNRC M.C. No. 2, Series of 2020 (j) Statement signed by its Chairperson, President/CEO/Executive Director and Treasurer/CFO/Finance Director, 15 indicating therein a full description of the MF-NGO's activities for the following periods: (1) past three (3) years, 16 (2) present year, and (3) next three (3) years. It shall include the following: Profile of clients or members for the preceding and current year; and List of main, branch and unit offices. (k) Business plan including list of products, projects and programs, method of marketing products, sources of funds and maturities of credit (l) Location map indicating the exact address of the principal office, signed by the President/CEO/Executive Director 17 and Corporate Secretary (m) Certificate for the Adoption of the Standard Chart of Accounts for MF-NGOs, signed by the Chairperson, President/CEO/Executive Director and Treasurer/CFO/Finance Director, 18 using the prescribed template 19 provided that the foregoing shall not prevent the Council from requiring the submission of other documents, as it may deem appropriate; provided, further , that the application for accreditation shall not be deemed completely filed with MNRC if the submission of documentary requirements is incomplete; and provided, finally , that such complete filing shall be determined by the MNRC Secretariat before the application may be elevated to the Council for evaluation/approval in a meeting duly called for the purpose. SECTION 6. Spin-Off Microfinance NGOs . The requirements in MNRC M.C. No. 2, Series of 2017 shall be applicable to applications of a newly-registered MF-NGO which is a spin-off of an old entity, i.e. , SEC-registered foundation or MF-NGOs. SECTION 7. Complete Filing of Application . In view of the expiration of MNRC Certificates of Accreditation issued on or before 31 March 2019, the Council expects to receive a considerable volume of applications prior to such period. To ensure timely processing of applications before the lapse of the said certificates, applications must be completely filed on or before 31 January 2022 . Complete filing of the application shall be made by filling out the sworn application through the link provided in the MNRC Website Corner. The answered items and uploaded documents must be thoroughly reviewed as amendments thereto or retractions are no longer allowed after the application has been submitted. Physical copies of the sworn documents and/or certification/s, with proper notarization and wet signatures of authorized and appropriate representatives of the MF-NGO, must be submitted to MNRC upon approval of application. Submission of the physical copies and certification 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 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 1307 Pasay City If submitted through registered mail/courier, kindly send a scanned copy of the certification and proof of transmittal, i.e. , receipt and tracking number at [emailprotected] . SECTION 8. MNRC Certificate of Accreditation . In a meeting duly called for the purpose, the Council shall resolve the application for accreditation of an MF-NGO. If approved, the MNRC Certificate of Accreditation shall be issued in favor of the MF-NGO, otherwise, a notice shall be sent stating therefor the reason/s for denying the application at that time. The certificate of accreditation shall be issued on the date of the MNRC meeting when the application was granted. It shall be valid for three (3) years from the date of issuance, unless earlier suspended or revoked by the Council for good cause after review. SECTION 9. Assessment of Accredited Microfinance NGOs . MNRC shall conduct an assessment of the operations of accredited MF-NGOs once every three (3) years, before renewal of accreditation or re-accreditation, using the MNRC Performance Standards covering microfinance operations of the preceding and current year (if applicable). MNRC shall draw on the results of the assessment to identify accredited MF-NGOs that need specific remedial measures. When warranted, MNRC shall determine and recommend appropriate corrective measures. The accredited MF-NGO shall be directed to adopt remedial measures to address the findings during the validation period. The Council may place the accredited MF-NGO on probation, or suspend or revoke the validity of the Certificate of Accreditation when upon assessment, the MF-NGO fails to meet the requirements set forth in Sections 2 to 7 of this M.C. SECTION 10. MNRC Reports . The Council reserves the right to issue and publish reports on the microfinance operations of all accredited MF-NGOs using the MNRC Performance Standards and submitted documentary requirements. Individual information of MF-NGOs shall not be divulged and shall remain confidential in compliance with applicable privacy laws. SECTION 11. Coverage/Amendment/Repeal . The foregoing application requirements shall be without prejudice to other regulatory requirements applicable to MF-NGOs as provided in laws, IRRs, M.C.s, and other issuances of the Council, provided that they are not inconsistent with this M.C. SECTION 12. Effectivity . This Circular shall take effect immediately. Issued this 24 November 2021, Pasay City. (SGD.) EMILIO B. AQUINO Chairperson ANNEX A I. Financial Performance Standards The Financial Performance Standards shall be used to assess the financial performance of MF-NGOs. These standards are comprised of the following indicators in the following areas: P ortfolio Quality (40%), E fficiency (20%), S ustainability (25%) and O utreach (15%) (PESO): Indicator Definition/Ratio Standard Weight Score Equivalent Points PORTFOLIO QUALITY 30 Portfolio at Risk Balance of loans with at least one day missed payment/ Total Loan Portfolio PAR-1 is 5% 15 5% or less >5% to 10% >10% to 15% >15% to 20% Above 20% 15 11 7 4 0 Loan Loss Reserve Ratio Total Allowance Provided/ Total Required Allowance Required Allowance: Current loans 1% PAR 1 to 30 2% PAR 31 to 60 20% PAR 61 to 90 50% PAR 91 & above and/or Loans restructured 100% 15 100% 70% to <100% 50% to <70% 30% to <50% below 30% 15 11 7 4 0 * Perfect score for those using ECL plus Restricted Balance, otherwise use the MNRC Standard with comparative results of MNRC vs. ECL (with annex to support) EFFICIENCY 20 Operating Expense Ratio Operating Costs 20 /Average Gross Loans Portfolio 30% and below 10 0 to 30% >30% to 40% >40% to 50% above 50% 10 6 4 0 Loan Officer Productivity No. of Active Borrowers/No. of Account Officers Group loans to 200 10 For group loans: 200 and above 150 to 199 100 to 149 below 100 5 3 1 0 Individual loans to 100 For individual loans: 100 and above 50 to 99 30 to 49 below 30 Note: If an MF-NGO uses only 1 methodology, an MF-NGO gets an additional 5 points 5 3 1 0 SUSTAINABILITY AND STABILITY 35 Operational Self-sufficiency Interest Income from Loans + Service Fees + Filing Fees + Fines, Penalties, Surcharges/Operating Costs + Administrative Costs (Direct & Indirect costs) 110% 5 110% and above 105% to <110% 100% to <105% 100% 5 4 3 0 Return on Assets Net Operating Income- Taxes Average Assets 2% 10 More than 2% 2% 1% but less than 2% Above 0 but less than 1% 0 and below 10 7 5 3 0 Current Ratio Current Assets Current liabilities 1.5 10 1.5 and above 1 to < 1.5 <1 10 5 0 Debt to Fund Balance Ratio Debt Fund Balance * Debt includes only external borrowings 4 10 4 and below above 4 to 9 more than 9 10 5 0 OUTREACH 15 Growth in Number of Active MF Clients Ending No. of Active MF Clients Beginning No. of Active Microfinance Clients 21 / Beginning No. of Active Microfinance Clients Increasing 5 5% or higher 0 to <5% below 0 5 3 0 Growth in MF Loan Portfolio Ending MF Loans Outstanding-Beginning MF Loans Outstanding Beginning MF Loans Outstanding Increasing 5 5% or higher 0 to <5% below 0 5 3 0 Depth of outreach Total Loans Outstanding/ Total Number of Borrowers GNI 20% or below 5 20 >20-100 >100-150 >150-200 >200-300 >300 5 4 3 2 1 0 TOTAL 100 Rating (%) (raw score/100) II. Social Performance Standards Using selected indicators from the Universal Standards for Social Performance Management (SPM), the MF-NGO shall be evaluated in the following areas: social goals and objectives, governance and accountability mechanisms, transparency, client protection, product design, services and delivery channels and the ethical treatment of clients. The following indicators and standards shall be used to evaluate the social performance of MF-NGOs: YES (1)/NO (0) DEFINE AND MONITOR SOCIAL GOALS 1. The MF-NGO has a vision/mission statement that clearly states the low-income people as target clientele. 2. The MF-NGO circulates the vision/mission to both board, management, and staff. 3. The MF-NGO has a strategy that clearly defines the specific profile of the target clientele. 4. The MF-NGO has identified specific indicators that measures its progress towards attaining the following: 4.1. Social Goals 4.2. Gender Development 4.3. Disaster Resiliency 4.4. Environmental Sustainability SUB-TOTAL 0 ENSURE BOARD, MANAGEMENT, AND EMPLOYEE COMMITMENT TO THE SOCIAL GOALS 5. The members of the board, management and staff are given continuing education on the social goals of the MF-NGO. 6. The MF-NGO adopts a Code of Ethics for board, management, and staff that guides them to actively participate in the realization of the MF-NGO's Vision, Mission and Social, Financial and Governance Goals (VMSFGG). The Code of Ethics should include, among others, upholding its stand against corruption, unethical behavior, poverty and inequality. 7. The board uses social performance data to provide strategic direction considering both social and financial goals. SUB-TOTAL 0 DESIGN PRODUCTS, SERVICES AND DELIVERY CHANNELS THAT MEET THE CLIENT'S NEEDS AND PREFERENCES 8. The MF-NGO conducts market research before introducing or modifying products and services. 9. The MF-NGO conducts client satisfaction surveys and exit surveys. 10. The MF-NGO uses the result of the client satisfaction and exit surveys in designing/improving its products and services. SUB-TOTAL 0 ABIDE BY CLIENT PROTECTION PRINCIPLES Prevention of over indebtedness 11. To prevent over indebtedness among clients, MF-NGO adopts a loan policy that defines the maximum percentage of a borrower's disposable income that can be applied to debt service, including debt from the MF-NGO and other lenders. This amount is used to determine the maximum loan amount and terms. 12. The MF-NGO submits and accesses credit data of all borrowers to and from the Credit Information Corporation (CIC) and/or Microfinance Information Data Sharing, Inc. (MIDaS). 13. The MF-NGO conducts repayment capacity analysis of each clientele prior to loan approval. Transparency 14. The MF-NGO discloses to clients the policy and documented processes on the transparency in product terms, conditions and all relevant costs related to the financial products and services it offers. 15. The MF-NGO gives clients adequate time to review the terms and conditions of financial products, ask questions and receive additional information prior to signing of contracts. 16. The MF-NGO complies with the Truth in Lending Act by clearly stating the amount and method of interest rate computation in the disclosure statement. The Truth in Lending Act is prominently displayed and posted in the premises of the MF-NGO. Fair and respectful treatment of clients 17. The MF-NGO has a client protection policy that promotes the fair and respectful treatment of clients. 18. A policy that clearly defines appropriate and inappropriate collection practices by both staff and collection agents is in place and enforced. 19. The MF-NGO trains its staff and third party collection agents on debt collection practices and loan recovery procedures. Mechanism for Complaint Resolution 20. The MF-NGO has an effective mechanism in place to receive and resolve complaints from clients. 21. The MF-NGO informs its clients about their rights to complain and how to submit a complaint. Privacy of Client Data 22. Client data (personal, transactional and financial) are kept secure and confidential through an established policy and documented processes, in compliance with the Data Privacy Act of 2012, and its Implementing Rules and Regulations and National Privacy Commission issuances. 23. Clients are informed about data privacy and the need for consent prior to the use of client-related data and information. SUB-TOTAL 0 TREAT EMPLOYEES RESPONSIBLY 24. A written human resource policy compliant with the Labor Code, gender-related and persons-with-disability laws is in place and is made available to all employees. 25. The MF-NGO complies with the minimum wage law. 26. The MF-NGO communicates to its employees the terms of their employment. 27. The MF-NGO provides continuous training to its staffs. SUB-TOTAL 0 TOTAL POINTS 0 III. Governance Standards Governance of MF-NGOs should follow the key principles of Good Governance on fairness, responsibility, accountability and transparency. These principles are translated into questions in the checklist below. The checklist shall be used to assess an MF-NGO's compliance to Governance Standards. A score of 1 is given for a 'YES' answer and a score of 0 for a 'No' answer. There is no score on partial compliance. GOVERNANCE GOOD PRACTICES REQUIRED FOR SOURCE OF INFORMATION THE BOARD'S GOVERNANCE RESPONSIBILITIES ESTABLISHING A COMPETENT BOARD Principle 1: The MF-NGO should be headed by a competent, working board to foster the long-term success of the organization, and to sustain its consistent growth and operation in a manner aligned with its VMSFGG and the long-term best interests of its members, clients, and other stakeholders. 1.1 (a) Is the MF-NGO's Board of Trustees ("BOT" or "Board") with a collective working knowledge, experience or expertise that is relevant to the MF-NGO and its VMSFGG? Mandatory for All Notice to Members' meeting (which should include the nominees for trustees and their qualifications) CV Company website Brief background or track record of relevant experience of the BOT in the company website 1.1 (b) Does the Board ensure that it has an appropriate mix of competence, expertise and concern for the poor and the marginalized to enable it to fulfill its roles, responsibilities and social advocacies and respond to the needs of the MF-NGO based on its stated purpose or mission? Mandatory for All Notice to Members' meeting (which should include the nominees for trustees and their qualifications) Company website CV Brief background or track record of relevant experience of the BOT in the company website 1.2 (a) Is the Board composed of a majority of non-executive trustees who possess the necessary qualifications to effectively participate and help secure objective, independent judgment on the MF-NGO's VMSFGG? Mandatory for All General Information Sheet (GIS) CV 1.2 (b) Is twenty percent (20%) of the Board composed of member-clients of the MF-NGO who possess the necessary qualifications and none of the disqualifications? At least 1 member-client for SMALL Mandatory for LARGE MF-NGO GIS 1.2 (c) Does the BOT periodically meet with a consultative structure ( e.g. , council, committee, or group), duly recognized by the board, composed of program members? Mandatory for All Minutes of the Meeting 1.3 Does the MF-NGO's Board Charter and Manual on Good Governance have a policy: 1.3 (a) on training of trustees, particularly on its social, financial and governance goals? Mandatory for All Board Charter and Manual on Good Governance Certification on Training of Officers and Directors relevant to financial, social and governance Manual on Good Governance should be available on the company's website 1.3 (b) on having an orientation program for first-time trustees and relevant annual continuing training for all trustees and key officers? Mandatory for All Board Charter and Manual on Good Governance Certification on Training of Officers and Directors relevant to financial, social and governance. 1.4 Does the MF-NGO have a policy on board diversity, including social consciousness and gender diversity? Mandatory for All Board Charter and Manual on Good Governance 1.5 Is the MF-NGO's Board assisted in its duties by a corporate secretary, who is a separate individual from the compliance officer, who annually attends relevant trainings, including those on good governance? Mandatory for All GIS Certification on Training of Officers and Directors relevant to financial, social and governance 1.6 Is the MF-NGO's Board assisted in its duties by a compliance officer, who annually attends relevant training, including those on good governance? Mandatory for All GIS Certification on Training of Officers and Directors relevant to financial, social and governance SUB-TOTAL ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD Principle 2: The fiduciary roles, responsibilities and accountabilities of the Board as provided under the law, the Microfinance NGO's AOI and BL, and other legal pronouncements and guidelines, particularly those in relation to its social goals, objectives and activities, should be clearly made known to all trustees and key officers as well as to members and other stakeholders. 2.1 Does the MF-NGO's Board act on a fully informed basis, in good faith, with due diligence and care and in the best interest of the MF- NGO and all its members and other stakeholders? Mandatory for All Presumption of Regularity Minutes and Resolution of the Board Meetings 2.2 (a) Does the MF-NGO's Board oversee the development of and approve the Microfinance NGO's VMSFGG, focusing on the low income and marginalized sectors as target clientele? Mandatory for All Reports Minutes and Resolution of the Board Meetings 2.2 (b) Does the MF-NGO's Board regularly review the VMSFGG and monitor the implementation of the goals, in order to sustain the MF-NGO's long-term viability? Mandatory for All Reports Minutes and Resolution of the Board Meetings 2.3 Does the Board ensure compliance with all applicable laws and their mechanisms, such as the Magna Carta for Women, all environmental laws, Labor Code and Anti-Discriminatory act? Mandatory for All Reports Company Manual HR Manual, Circulars Policies and Office Issuances 2.4 Is the Board headed by a competent and qualified chairperson? Mandatory for All CV of the Chairperson 2.5 (a) Has the Board been responsible for ensuring and adopting an effective succession planning program and retirement policy for trustees and key officers to ensure the MF-NGO's sustainability and continued assistance to its chosen sector/community? Mandatory for LARGE MF-NGO Succession Planning Program 2.5 (b) Has the Board set up rules/guidelines in case of cessation of any trustee from the BOT? Mandatory for All By-Laws Company's Manual, other manual or rules or guidelines for purpose of replacing a retired or resigned or removed or deceased trustee Board Manual Manual on Governance Office Order 2.6 (a) Does the Board align the remuneration of management with the nature, objectives and long-term interests of the MF-NGO? Mandatory for All Payroll/Remuneration Policy Compensation Report 2.6 (b) Does the Board not give its trustees any remuneration other than reasonable per diem ? Mandatory for All Payroll/Remuneration Policy Compensation Report 2.7 (a) Does the Board disclose in its Manual on Corporate Governance a formal and transparent board nomination and election policy, which includes how it accepts and reviews nominated candidates? Mandatory for All Nomination and Election Policy Company's Manual wherein it includes the nomination and election policy and procedures. 2.7 (b) Does the MF-NGO's nomination and election policy include an assessment of the effectiveness of the processes and procedures: (i) in the nomination or election of a trustee? Mandatory for All Result of Assessment Based on the Nomination and Election Policy Nomination Form and Guide Company's Manual, other manual or rules or guidelines for purpose of replacing a retired or resigned or removed or deceased trustee (ii) in the replacement of a trustee? Mandatory for All Result of Assessment Based on the Nomination and Election Policy Nomination Form and Guide Company's Manual, other manual or rules or guidelines for purpose of replacing a retired or resigned or removed or deceased trustee. 2.7 (c) Is the MF-NGO's process of identifying the quality of trustees aligned with its VMSFGG and strategic direction? Mandatory for All Internal Policies Board Minutes and Resolutions 2.8 Is the Board primarily responsible for approving: (i) the selection of key management officers? Mandatory for All Internal Policies Minutes and Resolutions of the Board Meetings (ii) the assessment of Key management officers? Mandatory for All Internal Policies Minutes and Resolutions of the Board Meetings 2.9 Does the Board oversee that an appropriate internal control system is in place, including setting up a policy and mechanism for monitoring and managing potential conflicts of interest in situations and transactions: (i) of management? Mandatory for All Internal Policies Conflict of Interest Statement (ii) of the BOT? Mandatory for All Internal Policies Conflict of Interest Statement (iii) of members? Mandatory for All Internal Policies Conflict of Interest Statement 2.10 (a) Does the Board oversee that a sound risk management framework is in place to effectively identify, monitor, assess and manage key risks? Mandatory for LARGE MF-NGO Risk Management Framework/Policy 2.10 (b) Does the risk management framework guide the Board in identifying the effectiveness of risk management strategies? Mandatory for LARGE MF-NGO Risk Management Framework/Policy 2.11 (a) Does the Board have a Board Charter that formalizes and clearly states its roles, responsibilities and accountabilities in carrying out its fiduciary duties, particularly in relation to social, financial and governance goals? Mandatory for All By-Laws Board Charter 2.11 (b) Does the Board Charter serve as a guide to the trustees in the performance of their functions? Mandatory for All Minutes of the Meeting Board Charter 2.11 (c) Is the Board Charter publicly available and posted on the MF-NGO's website? Mandatory for All Company Website SUB-TOTAL ESTABLISHING BOARD COMMITTEES Principle 3: Board committees should be set up to the extent possible to support the effective performance of the Board's functions, particularly with respect to audit, finance and risk and other key governance concerns, such as nomination and remuneration. The composition, functions and responsibilities of all committees established should be contained in a publicly available Committee Charter. 3.1 Does the Board establish board committees that focus on specific board functions to aid in the optimal performance of its roles and responsibilities? For a MF-NGO with relatively small and lean operations, does the Board identify specific members of the Board who shall be responsible for specific board functions? Mandatory for All Board Charter Manual on Good Governance Company website and it should provide an updated list of Members 3.2 (a) Does the MF-NGO's Board have an Audit Committee to enhance its oversight capability over the organization's financial reporting, internal control system, internal and external audit processes, and compliance with applicable laws and regulations? Mandatory for All Committee Charter Manual on Good Governance Company website 3.2 (b) Is the Audit Committee composed of at least three (3) appropriately qualified non-executive trustees? Mandatory for All Committee Charter Company website 3.2 (c) Does the Audit Committee have at least one (1) member who: (i) has a relevant background in social welfare? Mandatory for All Committee Charter (ii) has relevant background, knowledge, skills and/or experience in the areas of accounting, auditing and finance? Mandatory for All Committee Charter 3.3 (a) Does the MF-NGO's Board have a Governance Committee to assist the Board in the performance of its good governance responsibilities, including the functions of a Nomination and Remuneration Committee? Mandatory for LARGE MF-NGO Board Charter Manual on Good Governance 3.3 (b) Is the Governance Committee composed of at least three (3) members of the Board? The Chair of the Governance Committee must be a non-executive trustee. Mandatory for LARGE MF-NGO Committee Charter 3.3 (c) Does the MF-NGO's compliance officer provide technical support to the Governance Committee? Mandatory for LARGE MF-NGO Committee Charter 3.4 (a) Does the MF-NGO's Board have a Finance and Risk Committee that is tasked with the continuing review of the financial affairs and determination and management of potential risks of the MF-NGO? Mandatory for LARGE MF-NGO Board Charter Manual on Good Governance 3.4 (b) Is the Finance and Risk Committee composed of at least three (3) members of the Board? The Chair of the Governance Committee must be a non- executive trustee. Mandatory for LARGE MF-NGO Committee Charter 3.4 (c) Does the Finance and Risk Committee have at least one (1) member who: (i) has relevant knowledge and experience in finance? Mandatory for LARGE MF-NGO Committee Charter (ii) has relevant knowledge and experience in risk management? Mandatory for LARGE MF-NGO Committee Charter 3.4 (d) Does the MF-NGO's Risk Officer provide technical support to the Risk and Finance Committee? Mandatory for LARGE MF-NGO Committee Charter 3.5 (a) Are all established committees required to have committee charters stating in plain terms its purposes, memberships, structures, operations, reporting processes, resources and other relevant information? Mandatory for All Committee Charter 3.5 (b) Do the charters provide the standards for evaluating the performance of the committees? Mandatory for All Committee Charter 3.5 (c) Are the charters fully disclosed on the website? Mandatory for All Company Website SUB-TOTAL FOSTERING COMMITMENT Principle 4: To show full commitment to the MF-NGO, the trustees should devote the time and attention necessary to properly and effectively perform their duties and responsibilities, including sufficient time to be familiar with the MF-NGO's VMSFGG. 4.1 (a) Do the trustees attend and actively participate: (i) in at least 50% of Board and committee meetings? Mandatory for All Corporate Secretary's Certificate on Attendance of the Board (ii) in all annual/special membership meetings in person or through tele-/video-conferencing conducted in accordance with the rules and regulations of SEC, except when justifiable causes, such as, illness, death in the immediate family and serious accidents, prevent them from doing so? Mandatory for All Corporate Secretary's Certificate on Attendance of the Board 4.1 (b) Are the meeting materials sent to the trustees at least five (5) working days before the meeting? Mandatory for All Minutes of the Meeting 4.2 Do trustees notify the Board where he/she is an incumbent trustee before accepting a trusteeship/directorship in another organization/company, particularly if there is a potential conflict of interest? Mandatory for All Disclosure Statement of the Board Member SUB-TOTAL REINFORCING BOARD INDEPENDENCE Principle 5: The Board should endeavor to exercise an objective and independent judgment on all affairs of the MF-NGO. 5.1 (a) Do the Board's trustees serve for a total of nine (9) cumulative years from the date of first appointment? Mandatory for All Minutes of the annual members' meeting/GIS 5.1 (b) Does the MF-NGO provide for a minimum cooling-off period of one (1) year before a trustee can be reelected after serving a total of nine (9) cumulative years from date of first appointment? Mandatory for All Policies/Board Charter 5.2 (a) Are the positions of Chairperson of the Board and Executive Director/General Manager/President held by separate individuals? Mandatory for All Policies/Board Charter 5.2 (b) Do the Chairperson of the Board and Executive Director/General Manager/President each have clearly defined responsibilities? Mandatory for All Policies/Board Charter 5.3 Does a trustee with a material interest in any transaction affecting the Microfinance NGO abstain from taking part in the deliberation/s for the same? Mandatory for All Policies/Board Charter SUB-TOTAL ASSESSING BOARD PERFORMANCE Principle 6: The best measure of the Board's effectiveness is through an assessment process. The Board should regularly carry out evaluations to appraise its performance as a body, and assess whether it possesses the right mix of backgrounds and competencies. 6.1 Does the Board conduct an annual assessment of: (i) itself (Board) as a whole? Mandatory for All Assessment Results (ii) of the individual trustees? Mandatory for All Assessment Results (iii) of the committees? Mandatory for All Assessment Results 6.2 (a) Does the Board have in place a system that provides, at the minimum, criteria and process to determine the performance: (i) of the Board? Mandatory for All Board Policy (ii) of the individual trustees? Mandatory for All Board Policy (iii) of the committees? Mandatory for All Board Policy 6.2 (b) Does the Board have in place a system that allows for a feedback mechanism from the members? Mandatory for All Board Policy SUB-TOTAL STRENGTHENING BOARD ETHICS Principle 7: Members of the Board are duty-bound to apply high ethical standards, taking into account the interests of all members and other stakeholders. 7.1 (a) Does the Board adopt a Code of Conduct and Ethics, which provides standards for professional and ethical behavior, as well as articulate acceptable and unacceptable conduct and practices in internal and external dealings? Mandatory for All Code of Conduct and Ethics 7.1 (b) Is the Code properly disseminated: (i) to the Board? Mandatory for All Company Policy (ii) to management and all employees? Mandatory for All Company Policy 7.1 (c) Is the Code disclosed and made available to the public through the website? Mandatory for All Company Website 7.2 (a) Does the Board ensure the proper and efficient implementation and monitoring of compliance: (i) with the Code of Conduct and Ethics? Mandatory for All (ii) with internal policies? Mandatory for All SUB-TOTAL DISCLOSURE AND TRANSPARENCY ENHANCING ORGANIZATION DISCLOSURE POLICIES AND PROCEDURES Principle 8: An MF-NGO should establish disclosure policies and procedures that are practical and in accordance with best practices and regulatory expectations. 8.1 Does the MF-NGO's Board establish disclosure policies and procedures to ensure a comprehensive, accurate, reliable and timely disclosure to its members and other stakeholders of the organization's financial condition, results and operations? Mandatory for All Disclosure Policy/Minutes of the Annual Membership Meeting/Agenda of the Annual Membership Meeting 8.2 (a) Does the MF-NGO accurately, efficiently and timely account and disclose all its transactions especially: (i) on receipts of donations, grants, or contributions? Mandatory for All Sworn Statement and AFS (ii) on loans made by the management on behalf of the MF-NGO? Mandatory for All Sworn Statement and AFS (iii) on the disbursement and/or investment of donations, grants, contributions and loans made by the management on behalf of the MF-NGO? Mandatory for All Sworn Statement and AFS 8.2 (b) Does the Board practice fair presentation and preparation of its financial statements that are free from material misstatements? Mandatory for All Auditor's Report of AFS 8.3 Does the MF-NGO fully disclose all relevant and material information on individual members of the Board of Trustees and key officers including disclosure of any family member working as a staff/volunteer in the MF-NGO? Mandatory for All Disclosure Policy/Non-financial information/Notice of Members' Meeting (with background on Nominees to the Board) 8.4 (a) Does the MF-NGO disclose in its Manual on Good Governance its policies and procedures governing any actual or potential conflict of interest that involves: (i) its trustees Mandatory for All Disclosure Policy/Conflict of Interest Policies/Manual on Good Governance (ii) its management Mandatory for All Disclosure Policy/Conflict of Interest Policies/Manual on Good Governance (iii) its employees Mandatory for All Disclosure Policy/Conflict of Interest Policies/Manual on Good Governance 8.4 (b) Does the MF-NGO disclose in its Manual on Good Governance its policies and procedures governing any actual or potential conflict of interest that involves: (i) its partners Mandatory for All Disclosure Policy/Conflict of Interest Policies/Manual on Good Governance (ii) its donors Mandatory for All Disclosure Policy/Conflict of Interest Policies/Manual on Good Governance (iii) its clients Mandatory for All Disclosure Policy/Conflict of Interest Policies/Manual on Good Governance 8.5 Does the MF-NGO provide in its Manual on Good Governance clear disclosure of policies and procedures in setting: (i) the per diem of its trustees Mandatory for All Policy Disclosure/Manual on Good Governance (ii) the remuneration of management, taking into consideration the existing regulatory requirement on the level of administrative expenses? Mandatory for All Policy Disclosure/Manual on Good Governance 8.6 (a) Does the MF-NGO clearly define and disclose its Microenterprise Development Programs and Services: Mandatory for All Microenterprise Development Plan (i) to the regulators? Mandatory for All Reports (ii) in its website? Mandatory for All Company Website 8.7 Are the MF-NGO's governance policies, programs and procedures: (i) contained in its Manual on Good Governance and submitted to the regulators? Mandatory for All Manual on Good Governance (ii) posted on the MF-NGO's website? Mandatory for All Company Website SUB-TOTAL INCREASING FOCUS ON NON-FINANCIAL AND SUSTAINABILITY REPORTING Principle 9: An MF-NGO should ensure that material and reportable non-financial and sustainability issues are disclosed. ** 9.1 Do the trustees have a clear and focused policy on the disclosure of non-financial information, with emphasis on the management of economic, environmental, social and governance (EESG) issues of its operations, which underpin sustainability? ** For future compliance SUB-TOTAL INTERNAL CONTROL SYSTEM AND RISK MANAGEMENT FRAMEWORK STRENGTHENING THE INTERNAL CONTROL SYSTEM AND RISK MANAGEMENT FRAMEWORK Principle 11: To ensure the integrity, transparency and proper governance in the conduct of its operation, an MF-NGO should have separate, adequate and effective internal control and risk management systems. 11.1 Does the MF-NGO have a separate, adequate and effective: (i) internal control system Mandatory for All Internal Control Policy/Manual on Good Governance (ii) risk management system Mandatory for LARGE MF-NGO Risk Management Policy/Manual on Good Governance specifically designed to address its peculiar setup or structure taking into account its size, risk profile and complexity of operations? 11.2 Does the MF-NGO have in place an: (i) internal audit function Mandatory for LARGE MF-NGO Internal Control/Audit Policy/Manual on Good Governance (ii) a risk management function that provides independent and objective identification, assessment and monitoring of key risk exposures? Mandatory for LARGE MF-NGO Internal Control/Audit Policy/Manual on Good Governance SUB-TOTAL CULTIVATING A SYNERGIC RELATIONSHIP WITH MEMBERS PROMOTING MEMBER RIGHTS Principle 12: An MF-NGO should treat all members fairly and equitably. It should recognize and facilitate the exercise of their rights. 12.1 Does the Board ensure that the basic rights of a member are disclosed: (i) in the Manual of Good Governance? Mandatory for All Manual on Good Governance (ii) Its website? Mandatory for All Company Website 12.2 Does the Board send out and post on its website the notice of annual and special membership meetings with sufficient and relevant information at least twenty-one (21) calendar days before the meeting? Mandatory for All Company Website 12.3 Does the Board make available the Minutes of annual and special membership meetings within ten (10) business days from the date of the meeting by posting it on its website? Mandatory for All Company Website 12.4 (a) Does the Board make available, at the option of a member, an alternative dispute mechanism to resolve intra- corporate disputes in an amicable and effective manner? Mandatory for All Manual on Good Governance 12.4 (b) Is the alternative dispute mechanism included in the MF- NGO's Manual on Good Governance? Mandatory for All Manual on Good Governance SUB-TOTAL DUTIES TO STAKEHOLDERS RESPECTING RIGHTS OF STAKEHOLDERS AND EFFECTIVE REDRESS FOR VIOLATION OF STAKEHOLDERS' RIGHTS Principle 13: The rights of stakeholders established by law, by contractual relations and through voluntary commitments must be respected. Where stakeholders' rights and/or interests are at stake, stakeholders should have the opportunity to obtain prompt effective redress for the violation of their rights. 13.1 (a) Does the Board identify the MF-NGO's various stakeholders? Mandatory for All List of Stakeholders/Strategic Plan 13.1 (b) Does the Board promote cooperation between the organization's stakeholders and the MF-NGO in carrying out its VMSFGG, and in promoting social welfare and sustainability? Mandatory for All Memorandum of Agreement (MOA)/Loans Agreement with Creditors/Donors/Community 13.2 Does the Board establish clear policies and programs to provide a mechanism on the fair treatment and protection of stakeholders? Mandatory for All Stakeholder Policies/Manual on Good Governance 13.3 Does the Board adopt a transparent framework and process that allow stakeholders: Mandatory for All Stakeholder Policies/Manual on Good Governance (i) to communicate with the MF-NGO? Mandatory for All Stakeholder Policies/Manual on Good Governance (ii) to obtain redress for the violation of their rights? Mandatory for All Stakeholder Policies/Manual on Good Governance (iii) to freely communicate their concerns about illegal or unethical practices, without fear of retaliation and to have direct access to the board (whistle blowing policy)? Mandatory for All Website SUB-TOTAL ENCOURAGING STAKEHOLDERS' PARTICIPATION Principle 14: A mechanism for participation of various stakeholders should be developed to create a symbiotic environment with them in realizing the MF-NGO's VMSFGG. 14.1 Does the MF-NGO endeavor to create a good reputation by establishing policies, programs and procedures consistent with its VMSFGG and applicable laws to encourage donors and volunteers to contribute their resources, network, time and industry for the realization of the MF-NGO's VMSFGG and to ensure sustainability of the organization? Mandatory for All Stakeholder Policies/Manual on Good Governance 14.2 Does the MF-NGO enter into a collaboration with a corporation or for profit entity only when it would be advantageous to the organization's VMSFGG? Mandatory for All MOA/Stakeholder Policies/Manual on Good Governance 14.3 Is the MF-NGO accountable to its donors, project partners and the local communities it serves? Mandatory for All MOA/Stakeholder Policies/Manual on Good Governance 14.4 Does the MF-NGO consistently communicate and cooperate with the government and intergovernmental agencies? Mandatory for All Attendance on Meetings/Stakeholder Policies/Manual on Good Governance SUB-TOTAL TOTAL POINTS IV. Overall Scorecard for MNRC Performance Standards The MNRC Performance Standards Report Card, including the template for the above individual standards, i.e. , financial performance, social performance and governance, is downloadable at the MNRC Website Corner. The template shall be used to report the results of the MF-NGO's self-rating assessment required for accreditation. The following table shows the overall score of the MF-NGO on the MNRC Performance Standards: Full Points (1) Raw Score (2) Percentage Rating (3) = (2)/(1) Weight (4) Composite Score [(3)*(4)]*100 GOVERNANCE .30 LARGE MF- NGO 109 SMALL MF- NGO 98 FINANCIAL 100 .40 SOCIAL 30 .30 FINAL RATING ANNEX B REPUBLIC OF THE PHILIPPINES ) ________________________________) S.S. CERTIFICATION We hereby certify that all information in the following documents submitted to the Microfinance NGO Regulatory Council (MNRC), relevant to the application for accreditation of (NAME OF MICROFINANCE NGO) pursuant to Republic Act No. 10693, otherwise known as the Microfinance NGOs Act , its implementing rules and regulations, and related MNRC issuances, is true and correct and may be subject to the verification procedure of MNRC and its Secretariat: Application for MNRC Accreditation for the period 2022 to 2025 sent via Google form provided in the MNRC Website Corner MNRC Performance Standards Report Card Statement on the Microfinance Activities for the Past Three (3) Years, Present and Next Three (3) Years (Include only if applicable) * Statement signed and executed by its Chairperson, President/CEO/Executive Director and Treasurer/CFO/Finance Director, 22 indicating therein a full description of the MF-NGO's activities Business Plan (Include only if applicable) Location Map (Include only if applicable) Microfinance Operations of the Old Entity for the Last Three (3) Years (Include only if applicable) Certification from the Old Entity Stating that the New Entity is Established for the Microfinance Operations of the Old Entity (Include only if applicable) Any misrepresentation and/or manifestation of fraud in this application shall be a ground for its disapproval or the suspension or revocation of the MNRC Certificate of Accreditation, in case the same has already been issued. This shall be without prejudice to the application of other laws implementing separate penalties and/or sanctions for civil, criminal and/or administrative liabilities. _________________________________ Name of Chairperson _________________________________ Name of President/Equivalent Officer _________________________________ Name of Treasurer/Equivalent Officer _________________________________ Name of Corporate Secretary SUBSCRIBED AND SWORN TO BEFORE ME in __________________, this __ day of ____________, 20__, affiant exhibiting to me his/her attached proof of identity (with ID No. __________) issued on _____________ at _______________ and valid until ______________. NOTARY PUBLIC Doc. No. _____; Page No. _____; Book No. _____; Series of 20__. ANNEX C Template Curriculum Vitae ANNEX D REPUBLIC OF THE PHILIPPINES ) ________________________________) S.S. CERTIFICATE OF ADOPTION OF STANDARD CHART OF ACCOUNTS FOR MICROFINANCE NGOS KNOW ALL MEN BY THESE PRESENTS: We, _______________________________________________________________ and ___________________ of legal age, Filipinos, as the Chairperson of the Board, President and Trustee, respectively, of (NAME OF MICROFINANCE NGO) (the "Organization") with principal office address at __________________________________, after being duly sworn to in accordance with the law, hereby depose and state that for MNRC-accreditation purposes, the Organization is willing to adopt the Standard Chart of Accounts to be prescribed by the Microfinance NGO Regulatory Council (MNRC) for Microfinance NGOs. IN WITNESS WHEREOF , we have hereunto affixed our signatures this _____ day of ____________ 20__ at ______________________. _________________________________ Name of Chairperson _________________________________ Name of President/Equivalent Officer _________________________________ Name of Treasurer/Equivalent Officer SUBSCRIBED AND SWORN TO BEFORE ME in __________________, this __ day of ____________, 20__, affiant exhibiting to me his/her attached proof of identity (with ID No. __________) issued on _____________ at _______________ and valid until ______________. NOTARY PUBLIC Doc. No. _____; Page No. _____; Book No. _____; Series of 20__. Footnotes 1. This provision applies to MF-NGOs applying for MNRC accreditation and MF-NGOs accredited by MNRC from 2019 to 2022. 2. Other expenses/costs may be included/excluded upon the determination of the Council. 3. Please see: https://www.sec.gov.ph/wp-content/uploads/2019/11/2018MNRCFORM_TEMPLATE_MGG_181106.pdf 4. Please see Note 2. 5. The amount shall be maintained at all times. 6. An MF-NGO may adopt any of the formats provided in MNRC Memorandum Circular No. 1, Series of 2017. 7. It may be signed by the equivalent officer, as provided in the latest General Information Sheet (GIS) of the MF-NGO submitted to SEC. 8. MF-NGOs located in jurisdictions covered by SEC Extension Offices (EOs) shall obtain CNDI from their respective SEC-EOs. 9. Please see Annex "A". 10. Please see Note 7. 11. Id. 12. The NBI Clearance must remain valid upon complete filing of the application with MNRC. The application is deemed not filed with MNRC if the submission of documentary requirements is incomplete, as determined by the MNRC Secretariat. 13. This requirement may be subject to the exemptions/exclusions applied by DOLE. 14. Please see Annex "C". 15. Please see Note 7. 16. 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 submission lies with the MF-NGO. 17. Please see Note 7. 18. Id. 19. Please see Annex "D". 20. Operating Costs refer to the following: all expenses incurred by the branch offices plus seventy percent (70%) of the total costs incurred by the head office on the following expense items: Personnel Related Cost (Salaries and Wages, Employees Benefits, SSS, Pag-IBIG, PhilHealth premium contribution, Post-employment benefit expense; Transportation and other Travel expenses: Stationeries, Rent, Utilities (Power, Light and Water), Communication and Postage, Meetings, Taxes and Licenses, Gross Receipts Tax, Repairs and Maintenance, Insurance Expense, Information Technology Expense, Depreciation and Amortization, General Support Services, Client Community Services, Representation Expense, Miscellaneous. Administrative Expense (Shared Cost) : Salaries and Wages, Employees Benefits, SSS, Pag-IBIG, PhilHealth premium contribution, Transportation and other travel expenses, Stationaries and Office Supplies, Communication and Postage, Phone Bill, Publication, Printing, Subscription and Membership Dues and Representation Expense. Note: Other expenses/costs may be included/excluded upon the determination of the Council. 21. Active Microfinance Clients refer to clients with outstanding micro savings and/or micro loans. 22. Please see Note 7. Published in the Manila Bulletin and in The Philippine Star on December 9, 2021.