City offers soft loans to government employees
NOTING the plight of its regular employees who are at the mercy of loan sharks, the Dagupan City government is introducing a soft loan program that will have a minimal monthly interest rate.
City Treasurer Romelita Alcantara bared the loan scheme contained in a directive issued recently by Mayor Benjamin Lim in a dialogue with employees at the start of the year.
Per the mayor’s directive, city hall employees may now avail of “soft loans” with a monthly interest rate of only 2%, which is lower than the “5-6” deal extended by loan sharks (or 20% monthly interest).
The loan sharks normally hold on to the borrowers’ ATM (Automated Teller Machine) cards to guarantee payment. The cards are returned to the owners only after the lenders have withdrawn the principal from the borrower’s account.
Alcantara said there are two types of loans that could be availed of by the employees, namely: regular loans and emergency or petty cash loans.
The maximum amount for regular loans shall not exceed the one month basic salary of the employee, while the emergency or petty cash loans shall not exceed 50 % of the employees’ net take home pay of the succeeding month.
She said that regular loans will have to be paid in six equal monthly installments with an interest of 2% per month through payroll deduction.
The emergency loan, on the other hand, will be paid at 2% interest rate within a month, also through payroll deduction.
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