Despite the strict lockdown protocols in place, the Department of Trade and Industry (DTI) is anticipating more microlending applications from the business sector, with Small Business (SB) Corp. having approved P3.38 billion worth of loans already.
Trade Secretary Ramon M. Lopez told the reporters on Thursday that loan take up from the business sector has seen improvement, noting that applications per week rose from 200 to 1,000.
“But we were expecting more applications than these numbers,” the DTI chief said.
As a response, the trade department said the processing capacity for loan applications was increased to 4,000 per week.
Some 25,920 borrowers are seen to benefit from the recent loan approvals by SB Corp., an attached agency of DTI. Lopez said that less than 10 percent of the borrowings came from the tourism sector.
Of the approved loan amount, P2.78 billion was released already to 23,141 borrowers.
SB Corp. launched Covid-19 Assistance to Restart Enterprises program earlier to serve as a lending facility for struggling micro, small and medium enterprises (MSME) amid the pandemic.
Apart from SB Corp., other financial institutions have been giving focus as well to MSME lending.
Providing accessible lending to MSME is seen as crucial given that this sector because it accounts for 99 percent of the businesses and employs about 63 percent of the work force in the country.
“We should continue with this microlending program because there are still many takers, still in need of working capital loans to save their operations and jobs,” Lopez added.
Last year, DTI renewed its partnership with First Circle Growth Finance Corp. to extend more loans to MSMEs. The parties signed their first memorandum of understanding back in 2018 in a bid to promote financial literacy and access to the said industry.
From October 2018 to July 2020, the finance firm had extended borrowings to 6,000 SMEs and disbursed over 16,000 loans. In terms of amount, First Circle has provided P4.5 billion worth of loans to the MSME industry since the contract signing a few years ago.