Guide on OWWA Business Loan for OFWs Coverage
Here is a list of the eligible businesses and projects that the Overseas Workers Welfare Administration (OWWA) business loan offer for OFWs can finance.
The Philippine government recognizes the fact that overseas Filipino workers (OFWs) can’t work abroad forever. Aside from the fact that there is a lot of factors that can affect a Filipino’s foreign employment, it is also an irreversible loss of time to be away from your family and loved ones for many years.
Thus, OWWA wants to help the OFWs take the steps in building a future where they already have an option not to return abroad. One of these is through the Overseas Filipino Workers – Enterprise Development and Loan Program or the OFW-EDLP.
Through the OFW-EDLP, the government office wants to helps the OFWs in establishing a business or expanding an already existing one. When an OFW already has a profitable business in the country, there is already an option in case he/she does not want to return abroad.
With regards to the eligible projects under the OFW-EDLP, the said business loan offer of Overseas Workers Welfare Administration serves to main purposes — working capital and fixed asset acquisition. Here are the businesses that the OWWA loan for OFWs can finance:
- Construction/rental business
- Franchising business
- Service/trading business
- Contract tie-up with top 1000 corporations
- Transport service
- Agri- and non-agri production/manufacturing with identified market linkage and raw material sources
- Any viable project whether existing or new, that should generate a net cash flow sufficient to pay the projected amortization of the loan (or resulting into debt service ratio of at least 1)
With regards to the project cost sharing, OWWA stated that 20% of the total project cost (TPC) is the equity of the borrower. The remaining 80% may be financed by the government agency or the maximum loanable amount for the project.
The interest rate implemented by OWWA is at 7.5% per annum. It applies during the entire loan duration. With regards to the loan repayment, for short-term loans, the maximum loan term allowed is one (1) year. On Term loans, up to 7 years is allowed depending on the cash flow.