SIMPLIFYING processes involved in securing a loan could allow micro, small and medium-scale enterprises (MSMEs) to avoid shuttering operations after government’s measures against Covid-19 stalled the economy, according to Las Piñas Rep. Camille Villar.
During the virtual meeting of the House Committee on MSME Development about existing credit and loan facilities for MSMEs on Wednesday, Las Piñas Rep. Camille A. Villar said small businesses should be able to immediately tap available financing options. Villar noted the crucial role of the Small Business (SB) Corp. to help cash-strapped entrepreneurs.
According to Villar, vice-chairman of the House Committee on MSME Development, the role of SB Corp. is very important in “jumpstarting our economy because more than 95 percent of businesses in the Philippines are MSMEs.”
“So we really need to help them,” she said. “I believe they are the most affected.”
Villar also urged the SB Corp. to disseminate information to the local level and lessen documentary requirements to potential borrowers to help respective constituents of lawmakers avail of the loan facility.
Recently, SB Corp. announced it will open a lending window to MSMEs affected by the 76-day lockdown of Luzon island that began on March 17.
The facility allows for firms with asset size of less than P3 million to borrow between P10,000 and P200,000 and those with assets of up to P10 million may borrow up to P500,000.
SB Corp. Planning and Advocacy Head Frank Lloyd C. Gonzaga has said that a total of 4,198 loan applications have so far been processed by the government-owned financial institution with an aggregate amount of P571.17 million.
SB Corp. President Ma. Luna E. Cacanando added they have released some P23 million in loans to small businesses.
Villar, for her part, recognized the MSME sector as an important driver of the Philippine economy and a major contributor for the country’s growing labor force. In 2019, 99.56 percent of establishments in the Philippines were MSMEs or a total of 1.42 million enterprises. Nearly seven out of 10 employed work in the MSME sector.
Due to the coronavirus, the lawmaker said large-scale community quarantines, travel restrictions and social-distancing measures were implemented by the national and local governments, which drove a sharp fall in consumer and business spending and affected small businesses and forced some to shut down.