Additional P1 B set aside for MSME financing — DTI

MANILA, Philippines — The government will earmark another P1 billion next year to provide micro enterprises an alternative source of financing that is easy to access and made available at a reasonable cost.

The funding, which will be coursed through the Small Business Corp., the micro-financing arm of the Department of Trade and Industry (DTI), will aid more micro entrepreneurs to fund their businesses.

“The President has vowed to provide affordable micro-loans for micro entrepreneurs and we are here to deliver this promise through the Pondo sa Pagbabago at Pag-asenso (P3),” Trade Undersecretary Zenaida Maglaya said.

The P3 is a financing program intended to give micro, small, and medium enterprises better access to credit at lower interest rates.

The fund will also give priority to the country’s 30 poorest provinces.

The program was launched nationwide last April with an initial funding of P850 million, making available lower cost loans to Filipino micro entrepreneurs who are engaged in small businessese such as sari-sari stores and are vulnerable to usurious lenders in the absence of an alternative source.

“Through the P3, sectors can find relief from overly expensive borrowings as they pursue their livelihood activities,” Maglaya said.

As of Nov. 24, the DTI said a total of 16,210 micro entrepreneurs have been aided by P3 with four national micro finance institutions and 90 local conduits assisting in delivering the loans in the countryside.

The agency said a total of P485.41 million has been released to partner conduits and P307.80 million released to microfinance borrowers.

“We’re very grateful that this program has come into fruition, so we can help micro entrepreneurs who are at the bottom of the pyramid and create an entrepreneurial environment in the countryside that will also generate jobs for Filipinos,” Maglaya said.

Under the P3 program, a micro enterprise can borrow from P5,000 to P100,000 depending on its business need and repayment capacity with no collateral requirement. 

Interest rate and service fees do not exceed 2.5 percent monthly, as compared to the 20 percent monthly rate under the 5-6 loan system.