DBP launches loan facility for pandemic-hit small businesses

MANILA, Philippines — State-run Development Bank of the Philippines (DBP) has launched a new credit facility to support the recovery of micro, small and medium enterprises (MSMEs) from the impact of the pandemic.

Dubbed as the MSME Recovery Program, the new credit line is a sub-program of the DBP’s Rehabilitation Support Program on Severe Events (RESPONSE) aimed at providing financing assistance for the recovery of both public and private institutions that have been adversely affected by the health crisis.

The program will also provide wholesale lending to institutions, such as rural banks, thrift banks, microfinance-oriented banks, and non-bank financial institutions, including cooperatives and microfinance institutions, for relending to MSME borrowers.

The DBP said its new loan program would offer low interest rates and flexible terms to finance MSMEs operating expenses, in line with Republic Act 11494 or the Bayanihan to Recover as One Act.

Eligible borrowers include duly registered medium enterprises, including start-ups and cooperatives, engaged in agri-fishery and non-essential businesses.

DBP executive vice president for Development Lending Jose Gabino Dimayuga said the new credit facility has no collateral requirement for loans amounting to P3 million and below.

He said qualified borrowers would be able to borrow up to 100 percent of their one-year cash operating expenses based on their 2019 audited financial statements or 2020 interim financial statements.