DTI Allots ₱1 Billion Budget For MSME Loans
The Department of Trade and Industry (DTI) allots ₱1 billion budget for a loan program next year through their micro-financing arm, The Small Business Corp. (SBC).
This loan program will provide an alternative source of funds for Filipino small and medium business owners.
This loan program is dubbed as Pondo sa Pagbabago at Pag-asenso (P3) and was initiated by the President to provide affordable micro loans to micro entrepreneurs according to DTI- Regional Operations Group Undersecretary Zenaida Maglaya.
The popularity of loan sharks who impose steep interest rates is one of the main reason why P3 was established. With this loan program of President Duterte, entrepreneurs will reduce their borrowing cost and encourage them to avoid loan sharks. The P3 prioritizes the 30 poorest provinces in the country.
This loan program was launched by the government earlier this year in April, with an initial funding of ₱850 million. As of November 24, P3 helped 16,210 entrepreneurs and has released a total of ₱485.41 million to partner conduits and ₱307.80 million to microfinance borrowers.
Other than being a source of funding for MSME entrepreneurs in the country, P3 also helps stabilize the supply and cost of the commodities in the public markets, offer employment, generate more income for Filipinos, and encourage Filipino small and medium business owners to grow their businesses.
The funding of ₱1 billion for the year 2018 will be coursed through the SBC. The SBC will then accredit partner institutions like microfinance institutions (MFIs), cooperatives, and associations as the conduits for the funds.
According to Maglaya, this program can help micro entrepreneurs at the bottom of the pyramid to create an entrepreneurial environment in the countryside that will also generate jobs for Filipinos.
Primary beneficiaries are those with no easy access to credit, including market vendors, agri-businessmen, and members of cooperatives and industry associations.
An entrepreneur can borrow between ₱5,000 and ₱100,000, depending on his needs and repayment capacity with no collateral requirement.
P3 only requires minimal documentation; takes one day to process an application; has a monthly interest rate of 2.5%; and collects repayments either daily or weekly.