The Small Business Corp. (SB Corp.) announced on Monday the opening of P1.7-billion loan facility for micro small and medium enterprises (MSME).
SB Corp. President and Chief Executive Officer Maria Luna E. Cacanando on Monday said the loans will coursed through the Pondo sa Pagbabago at Pag-asenso (P3) program, the government’s lending measure for MSMEs.
“We are keeping the momentum going, targeting the release of at least P1.7 billion in P3 loans by [the] end [of] 2018. The P1 billion a year in P3 funds will support at least 40,000 micro enterprises serviced by more than 200 credit delivery partners spread out in all provinces of the country,” she said.
Each province will be allocated with at least P10 million in P3 funds, according to Cacanando. The P3 program is designed to veer MSMEs away from onerous moneylending schemes, such as the so-called 5-6 loan scheme.
Small enterprises can borrow as much as P200,000 from this loaning measure, with a maximum interest rate of 2.5 percent per month with no collateral requirement. This is lower compared to the 20 percent per day, week or month interest charged by 5-6 lenders.
Cacanando also said SB Corp. can now redirect all its energy and resources on financing MSMEs, with the recent removal of its guarantee functions.
President Duterte last week issued Executive Order 58 that approved the merger of the Philippine Export-Import Credit Agency and the Home Guaranty Corp. With the amalgamation, the two agencies are now named the Philippine Guarantee Corp. (PhilGuarantee).
The new EO also stripped SB Corp. of all its guarantee-related functions, programs, funds, assets and liabilities. The agency was instructed to turn over its corporate-funded guarantee reserve fund and other guarantees it manages to PhilGuarantee.
“We welcome this new development as a step toward more standardized policies and processes that will facilitate timely delivery of services to the public. It is very clear that the national government is trying to address the concerns of operational redundancies,” the SB Corp. chief said.
The SB Corp. reported it has more than 2,000 active borrowers nationwide and 154 partner financial institutions. The agency tasked to bankroll MSMEs also engages in capacitating financial institutions on risk-based lending and account officers on loan evaluation.