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ARDCI’S SAVINGS AND LOAN SYSTEM
HOW IS THE SLS NETWORK ESTABLISHED?
ARDCI penetrates its target areas by establishing a network of Savings and Loans Systems (SLSs), in close coordination with Local Government Units and other key agencies.
WHAT IS A SLS?
The Savings and Loan System (SLS) is a microfinance network composed of a minimum of 5 Guarantee Groups (GGs) with five (5) members per group, organized to mobilize savings, provide access to micro-credit to fund viable micro-businesses and access to micro-insurance through group term insurance.
WHY IS AN SLS IMPORTANT?
1. It encourages members to save and provides them with the opportunity to generate income from micro-businesses, thereby, allowing them financial security.
2. It provides a mechanism to operate a non-collateral lending system for its members.
3. It allows strict supervision and monitoring of loans, thereby creating the appropriate social pressures required to ensure prompt and complete repayment in line with agreed schedules.
4. It promotes the principles of disciplined saving and lending.It acts as a vehicle that provides other non-financial services, like micro-insurance and capability-building and skills-enhancement activities.
HOW ARE SLSS FORMED?
Barangay residents or potential members who have satisfactorily completed the Guarantee Group Compulsory Training (GGCT), passed the Group Recognition Test (GRT) are organized to form their GGs and SLS.
Initially, 10 members (2 GGs) can form an SLS. It may eventually complete the 25 members (5 GGs) requirement within six months.
Diagram of a Savings and Loan System (SLS) Diagram of a Guarantee Group (GG)
WHAT IS A GG IN AN SLS?
A Guarantee Group (GG) consists of five members, each of which can access loans from the SLS to fund microbusinesses. The GG is a system by which one member’s individual loan is guaranteed by the other four members. Thus, if an individual borrower is unable to repay part, or all, of a loan as scheduled, the four co-guarantors become jointly and severally liable to continue repaying the loan balance.
HOW ARE GGS FORMED?
Barangay residents who have satisfactorily completed the GGCT, passed the GRT, and have been profiled by means testing, are grouped together in fives to formally establish their GGs, and eventually, their SLS.
WHY SLS MEETING IS IMPORTANT?
The center of communication in the SLS is through productive SLS meeting. It is a venue wherein the members and the CDO interact with each other, gather SLS collection, resolve issues and provide updates and information, gather and submit data/documents needed to access ARDCI’s products and services, and process loan applications. ARDCI’s SAVINGS
ARDCI’s savings products are envisioned to provide long-term sources of capital that are more dependable and less costly than commercial loans.
ARDCI intends to mobilize savings through proper disposition to acquire more voluntary savings from the members.
1. Members save for reservation purposes such as investments, social ad religious obligations, scheduled expenses and future consumptions.
2. They also make use of savings to deal with emergencies, personal or family needs and unforecast expenses.
3. Also, some poor households may rely first on savings accumulation before they have effective demand for credit.
4. While in most cases, members utilize savings facilities for the purpose of creating safety nets to overcome the costly repercussions of health emergencies. But if there is enough money saved, it would be more practical to get their reserved savings than turn to excessive borrowings.
WHY SAVING HABIT IS IMPORTANT?
Small amounts saved regularly grow faster than you might think.
Savings cost nothing, only determination and effort. Regular weekly savings in ARDCI generate capital for the Revolving Loan Fund (RLF) that is lent to members. The more capital ARDCI realizes from savings, which it subsequently lends at interest, the more its loanable funds grow.
Saving ensures that surpluses are not wasted and are available for future needs.
Savings reinforces discipline.
Savings eases the impact of natural calamities.
Savings helps finance both providential and educational needs.
ARDCI’S COMPULSORY SAVINGS (CBU) AND VOLUNTARY SAVINGS (VS) 
ARDCI’S LOAN PRODUCTS
Lying at the core of ARDCI’s development program for the poor is providing them with a distinct opportunity to gain access to collateral-free credit that would enable them to realize additional income either by implementing viable and profitable micro-businesses or by financially supporting their already existing small enterprises and other needs.
What is a microbusiness (MB)?
A Microbusiness is a family-based production, processing, and/or marketing activity aimed to generate profit, and is within the borrower’s capacity to manage successfully. The MB ideally needs little additional technical and financial support to ensure its viability.
A Microbusiness:
1. is self-defined by its proprietor;
2. is low-cost;
3. optimizes the use of local resources;
4. is household-based, family members supplying labor and proprietorship;
5. is profitable/demand driven/market-led;
6. is environment-friendly; and
7. is timely.
Multipurpose Loans
can be used for educational needs, house improvement, acquisition of assets and other household expenses/needs. These are unproductive loans which the member can opt to avail
ARDCI’S MICRO-INSURANCE
ARDCI’s micro-insurance is a group term insurance for its members. It aims to provide members with financial support in cases of death or disability. It also removes the burden of the GG or SLS in paying deceased or disabled members’ outstanding loans.
It provides a means for “loan redemption” and loan security in cases of death or disability of members, thus, protecting ARDCI’s Revolving Loan Fund, avoiding credit risk and ensuring sustainability.
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