State-owned SB Corp reaches out to SMEs

CEBU, Philippines - State-run financial institution SB Corporation urged Cebuano entrepreneurs once again to connect with the agency, especially those that are requiring funding assistance.

Ma. Luna E. Carcanando, SB Corporation chief executive officer , reiterated the agency's call for entrepreneurs to check out several financing products currently offered by SB Corp., amid the impression that majority of SMEs are still facing lack of financial or credit access.

According to Carcanando, there is enough financial products to assist the entrepreneurs, but they have to exert effort in connecting with the finance institutions, like SB Corp.

Carcanando's call, which also reinforced the pronouncements made earlier by other government officials, saying there is financial access for SMEs in the Philippines, is a quick response to the recent findings released by Asian Development Bank (ADB) indicating that SMEs in the Philippines badly need the state's intervention in term of credit support.

In its "Asia Small and Medium-sized Enterprise (SME) Finance Monitor 2014," the development bank said extensive policy measures for improving SME access to finance is one way to ensure the survival of small firms.

The annual report, which assesses 20 countries in developing Asia including the Philippines, noted that SMEs make up an average of 96 percent of all registered firms and employ 62 percent of the labor force. However, they contribute only 42 percent of economic output.

"Asia has millions of SMEs but few of them are able to grow to the point where they can innovate or be part of the global supply chain," said Noritaka Akamatsu, senior advisor in ADB's Sustainable Development and Climate Change Department, which produced the report.

"To do this, they need more growth capital and opportunities to access various financing channels," he added.

The paper pushed for including sharpening SME competitiveness in critical policy agenda, given the anticipated low SME survival rate and shift to liberalized trade and investment.

"Limited access to bank credit is a persistent problem in Asia and the Pacific. Lending to SMEs has declined over the course of the global financial crisis and in 2014, they received only 18.7 percent of total bank loans," said the report.

"Governments in the region need to help SMEs become more competitive and able to participate in global value chains. This includes governments making it easier for SMEs to access new financing, such as supply chain finance," continued the paper.

In July, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) also released a study calling for government-initiated reforms that will make trade finance services more flexible and tailored to the requirements of SMEs.

The export sector in Cebu has been calling for the resolution of obvious "disconnection" between the players and the government, in terms of its linkage to credit access.

"There are a lot of things happening, but we don't know that these programs exist. There should be a proper information dissemination directed for the players," said Gifts, Decors and Houewares Exporters Foundation Inc., (Cebu-GDH) President Venus Genson.

"The government has so much plans," she said but some entrepreneurs like herself are not aware of these good support mechanisms.

Because the access to financing among MSMEs is one of the long overdue battle cries of the sector, Carcanando said SB Corp. will focus on providing direct loan access, aside from its other businesses such as wholesale lending and guarantees, among others.  (FREEMAN)