The city government will grant loans to its employees at minimum interest rates as part of Mayor Benjamin S. Lim’s vision to improve the economic well-being of the city employees.

“It is about time that we put a stop to loan sharks,” Lim said even as he noted that the loan grant of the city government will charge only two percent interest rate compared with the 20% interest rate of loan sharks.

Lim said that the city government is serious in its effort to help its employees and to protect them from loan sharks who take advantage of their poor financial situation.

According to employees who borrow money on a 5-6 system, loan sharks charge the city employees with excessive interest rates and take hold of their ATM cards as guarantee of payments. The ATM cards are returned to the owners when the loan sharks have withdrawn the money.        

According to city treasurer Romelita Alcantara, two types of loans will be granted to employees namely: regular loans and emergency or petty cash loans.

Based on the proposed mechanics of the loan facility, the maximum amount to be granted for regular loans shall not exceed the one-month basic salary of the employee, while loanable amount for emergency or petty cash loans shall not exceed 50 percent of the employee’s net take home pay of the preceding month.

Alcantara said regular loans will be paid in six equal monthly installments with an interest rate of two percent per month through payroll deduction.

The emergency loan, on the other hand, will be paid in full with two percent interest rate within a month also through payroll deduction.    

Alcantara said that regular plantilla personnel of the city government can avail of the loan. Employees who are on a month-long leave of absence and who do not have a sufficient net take home pay at the time of the availment of loan are disqualified to avail of the loan.    

She said that department heads will be responsible for evaluating the loan application of their respective staff based on policies established, and at the same time, recommend for the loan approval.     

“The accounting office shall be responsible in the strict implementation of the payment scheme through payroll deduction,” Alcantara pointed out.

Aside from the grant of lower interest loans to city employees, the city government will also launch a housing program for them by first quarter this year. (Sunshine D. Robles)