Higher zero-interest loan cap for coops pushed in Davao City amid inflation

Due to continued inflationary pressures, Davao City Councilor Al-Ryan Alejandre is seeking to expand the city’s zero-interest lending program for cooperatives by increasing borrowing ceilings under the Cooperative Financial Assistance Program (CFAP).

Under the proposed changes, micro and small cooperatives may access ₱300,000 to ₱500,000, up from the current ₱100,000 to ₱300,000 range.

Meanwhile, medium and large cooperatives could borrow at ₱1 million to ₱2 million from the existing ₱300,000 to ₱500,000 ceiling.

Alejandre emphasized that the higher borrowing ceilings are intended to make the program more responsive to inflation and more useful for expanding cooperatives operations.

“A ₱1-million loan today is worth less than before. The increase is to meet the borrowers’ needs,” Alejandre said during the Pulong-Pulong sa Dabawenyos at the Sangguniang Panlungsod on April 28.

While the proposal seeks to raise loan limits, Alejandre said the measure also aims to address persistent barriers that prevent many cooperatives from accessing existing financial support.

He underscored the need to establish barangay-level cooperative committees to improve coordination, monitoring, and access, adding that many communities still lack a designated focal person for cooperative-related concerns.

“This structure will help strengthen support for cooperatives at the grassroots level,” he said.

Furthermore, Alejandre acknowledged that access remains limited, with only 38 of the city’s approximately 400 cooperatives currently accredited to qualify for the program.

He noted compliance with requirements and repayment capacity remain key concerns, alongside the need to improve monitoring of loan utilization and borrower performance.

The proposal is currently being finalized in coordination with the City Cooperative Development Office, with a target for ordinance filing by 2026 and implementation by 2027.

“We will fast-track it — hopefully it should be completed by June,” he said.