An OFW’s Guide To OWWA’s Business Loan Programs

3 min. read By eCompareMo on

If you’re an OFW looking to start a business, you should know that there are now lots of options with banks and legitimate financial institutions to apply for a loan for business purposes.

For one, there is the government-supported Overseas Workers Welfare Administration (OWWA) loan program, the requirements for which are not as hard as you think.

In fact, OWWA has two types of OFW loans. One is called the OFW Reintegration Program, and the other one is in partnership with the Landbank of the Philippines, called the OFW Enterprise Development and Loan Program (OFW-EDLP).

Let’s take a closer look at both these business loans to better determine which one is the right OWWA loan for you.

1. OWWA Reintegration Program

This is for retired OFWs or those that are no longer planning work abroad.

As the name suggests, the OWWA Reintegration Program aims to provide financial assistance and livelihood to former OFWs. To be eligible, the OFW must be an active or non-active OWWA member, within a year after coming home to the country.

The reintegration program also applies to OFWs who have been repatriated or displaced for political reasons in the country they worked at.

How much can I loan from this program?

The livelihood assistance is up to P10,000 with technical and/or entrepreneurial training, starter kits/goods, and other services that will enable the former OFWs to start their own business or livelihood.

(Read: OWWA Benefits Every OFW Needs To Know)

2. The OFW Enterprise Development and Loan Program (OFW-EDLP)

The OFW-EDLP program is where OWWA provides loans to OFWs, whether they are about to retire or are still working abroad. This is done in partnership with Land Bank of the Philippines (LBP).

This program is a little more complicated than the OWWA Reintegration Program, but it also allows you to loan a larger amount.

To avail of the loan, the OFWs must be eligible and provide the documents stated below. You will also be required by OWWA to attend an orientation seminar; the Enterprise Development Training (EDT) seminar.

The EDT provides the OFW with an orientation on finance and business management, and other income-generated livelihoods, as well as relevant information on setting up and sustaining a business.

How much can I loan from this program?

Take note that the interest rate is at 7.5% per annum (per year), for the whole loan term. The loan amount will depend on the needs of the project, but these are the posted loan amounts to borrow:

For Single Proprietors Minimum loan amount: P100,000 Maximum loan amount: P2,000,000

For Partnerships, Corporations, and Cooperatives Minimum loan amount: P100,000 Maximum loan amount: P5,000,000

The OWWA website provides detailed eligibility and document requirements for OFW-EDLP applicants. The loan purpose must be about “Working Capital and Fixed Asset Acquisition,” as stipulated by OWWA.

What are the eligibility requirements?

  • Certified Member, whether active or non-active
  • Completed the Enhanced Entrepreneurial Development Training (EEDT)
  • For OFWs working abroad, they can apply through the following authorized representatives:
    • Legal spouse
    • Parents not older than 60 years old
    • Children at least 18 years old

What are the eligible businesses/projects for an OFW-EDLP Loan?

  • Franchising
  • Contract tie-up with top 1000 corporations
  • Agricultural and non-agricultural production/manufacturing
  • Service/trading business
  • Construction/rental business
  • Transport service
  • Or any viable project, new or existing

The maximum loan term for loans considered short-term is up to one year. Term loans, on the other hand, are based on cash flow, but they should not reach more than seven years and come with a two-year maximum grace period.

What can I use as loan security or collateral?

If you are going to be taking out an OFW-EDLP loan, you are going to need to provide collateral. The following are the acceptable collateral sources:

  • Mortgageable project assets such as machines or equipment, and other assets of the borrower
  • Object of financing

(Read: 5 Career Opportunities For OFWs In Their Sunset Years)

How to apply for an OWWA OFW-EDLP Loan?

  • Submit a business plan showing the complete description of your business, which shows you can earn or are earning at least P10,000 a month
  • Undergo an EDT Seminar at OWWA regional offices, and get an EDT Certificate of Completion
  • Submit a completely filled out OWWA Information Sheet
  • If the business is already in existence, submit the following:
    • Mayor’s Permit
    • DTI Certificate of Registration
    • Income Tax Return for the last three (3) years
    • Financial Statements filed with BIR, and latest Interim Financial Statements
    • Business Statement of Assets and Liabilities

Know more about the updated application process by visiting the nearest OWWA office. Loan processing usually takes around 45 days.

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