Bid to buy out Negros workers? loans a failure
Alex V. Pal
Inquirer
DUMAGUETE CITY—A program designed to help debt-trapped provincial employees by buying out their loans from high-charging lending institutions and giving them lower interest rates through a cooperative, is failing.
This is because the employees went back to the lending institutions as soon as their debts were cleared.
“We can’t stop the employees from going back to the lending institutions because it’s their personal decision,” said lawyer Ismael Martinez, head of the Provincial General Services Office and chair of the Negros Oriental Provincial Employees Multi Purpose Cooperative (Nopemco).
The Nopemco had obtained a P1- million loan from the provincial government to be used for the loan buyout program to be given to the members at only seven-percent interest per annum.
Under the terms of the provincial board resolution, the loan to be given to the cooperative will buy out the outstanding loans of the cooperative members from lending institutions so they will no longer patronize the same.
About 90 cooperative members availed themselves of the loan buyout program as of July.
Martinez said the program almost threw the lending institutions out of business, forcing them to lower their interest rates from a high of 18 percent to only 12 percent per annum.
The lowered interest rates also enticed the employees to return to the lending agencies to seek additional loans. “Some employees are really desperate. They need money for urgent matters, such as for the hospitalization of family members,” Martinez said.
But a 12-percent interest, in addition to a four-percent service charge, does not necessarily come cheap. Computations done by cooperative officials revealed that one could only take a net amount of P29,000 out of a P40,000 loan.
This is because the interest for two years, as well as the service charge, is deducted from the amount that one intends to borrow.
There are about 400 Nopemco members out of the 1,500 employees of the provincial government.
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