Key challenges continue to impede MSME growth

CEBU, Philippines - The robust business environment in the country makes it an enabling environment for social enterprises to grow but key challenges are keeping them from progressing.

Asteria Caberte, regional head of the Department of Trade and Industry in Central Visayas, cited these challenges which include the country's taxation system that follows same criteria for both small and large businesses.

Speaking during the Social Entrepreneurship Conference in Cebu City yesterday, she said: "There is gap in the skills and competence of social enterprises. Finding staff with adequate business skills, especially in rural and remote areas, may prove to be a challenge."

"Access to finance remains a challenge for MSMEs, including social enterprises. They find difficulty in applying for loans due to lack of collateral and history," Caberte told conference participants including entrepreneurs and professionals.

The DTI official also said that MSMEs, including social enterprises, have trouble navigating fiscal and regulatory requirements.

"Micro enterprises may find it particularly difficult due to lack of skills in records keeping," she added.

In August 2015, the British Council released a study entitled Review of Social Enterprise Activity in the Philippines, which looked into the current enterprise landscape in the country and determines existing skills gap, primary barriers to growth and other challenges.

The study found out that social enterprises are often city-centric and that microfinance has been crucial in the development of the social enterprise movement.

In addition, results of a 2014 study of the Institute for Social Entrepreneurship in Asia (ISEA) and Oxfam on the roles, potentials and challenges for social enterprises in Asia revealed that Philippine social enterprises have covered at least 2.5 million Filipinos living below the poverty line, which could double with the support from government.

Social enterprises can leverage income generation and capacity development of the poor.

"These enterprises can influence the closing of the inequality gap by ensuring the reflow of profits back to the community. Social entrepreneurship offers an innovative approach to poverty reduction," Caberte said.

Responsible and inclusive businesses do not only focus on maintaining a sustainable business but also address social development concerns. This is what has emerged in recent years as social entrepreneurship — business with a cause.

A bill called Poverty Reduction through Social Enterprise (PRESENT) is now sought to be passed into law.

One of the provisions of the bill authored by Senator Bam Aquino is the creation of the PRESENT program to help promote an enabling environment for social enterprises engaged in poverty reduction, economic and social development.

Key to strengthening inclusive growth in the country is equal access to opportunities for local businesses to further develop their potential for growth.   (FREEMAN)