The Industrial Guarantee and Loan Fund (IGLF), a unit of the Development Bank of the Philippines (DBP), has failed to disburse the full amount of its target for microloans totaling P1.2 billion.
According to the Commission on Audit (COA), the IGLF intended to approve and release more or less P1.2 billion for eligible micro-, small- and medium-scale enterprises, but only 27.51 percent, or P330.142 million, was actually released during the period.
The IGLF said it has adopted measures to effectively and efficiently achieve its loan target for micro and small-scale borrowers.
IGLF has released loans amounting to P3.341 billion out of P4 billion as of end-2014.
Of the amount, P2.257 billion was released as short-term loans, surpassing its projected release of only P1.2 billion. It added that P431.759-million loans went to microenterprises, P322.258 million were for medium to long-term borrowers and only P330.142 million was allocated for
microfinance loans.
The IGLF said the primary reason for the plunge in IGLF microfinance approvals and releases was the continuous nonimplementation of the approved omnibus credit line of the People’s Credit and Finance Corp. (PCFC).
The PCFC traditionally contributed about 40 percent of wholesale banking, translating to IGLF utilization. “An equally significant reason for this deceleration is the decision of the IGLF to fully support the government’s inclusive growth agenda.
The IGLF encourages all lending units of the DBP to give priority to industries or sectors that are powerful drivers of economic growth, employment generation and maximization of the total value chain such as, but not limited to manufacturing, tourism and agribusiness. Microfinance activities on the other hand, do not have value addition,” the COA said.
The COA also said that, while loans and receivables recorded a net increase of P1.34 billion in 2014, the corresponding interest income registered a net decrease of P38.048 million.
“This can be attributed to the lesser amount of releases to microfinance accounts with an interest rate of 4.75 percent, than that of the short-term accounts with lowest interest rate of 2.25 percent,” the COA said.
“The management assured us that the IGLF will continue and push even harder to effectively and efficiently pursue and achieve its projected loan approvals and releases,” COA Director Emelita Quirante said.
The IGLF has total resources of P6.736 billion in 2014, higher by 0.11 percent than the P2.729 billion registered in 2013.
Net income declined by 25 percent to P104.035 million, lower than the P140.373 million recorded in 2013.