IGLF boosts thrust to help MSMEs

CEBU, Philippines - Industrial Guarantee and Loan Fund (IGLF) continues its thrust on the establishment and expansion of micro, small and medium enterprises (MSMEs) by organizing activities and seminars that would benefit such sector.

Recognizing that creditworthiness is the common problem of MSMEs to have formal access to finances, IGLF came up with a forum on risk-based lending for MSMEs together with its member-institution, University of the Philippines-Institute for Small-Scale Industries.

The forum that was held yesterday at Santorini Ballroom of the Hotel Elizabeth was considered to be the second run for the entire country, following the initial forum last June 7 in Manila and another to come on October 18 in Davao.

IGLF acknowledges the significance of such forum for the banking sector, microfinance institutions, non-government organizations and lending cooperatives which the former considers as its partners in progress of improving access to finance by MSMEs.

IGLF Chief Executive Officer and Development Bank of the Philippines (DBP) Executive Vice President Benedicto Ernesto Bitonio Jr. said that the MSME industry is perceived to be a high-risk sector that makes it difficult for them to obtain credit or be charged with exorbitant interest rates.

The keynote speech was delivered by Rita Dagal, DBP Senior Manager and IGLF Head, on behalf of Bitonio during yesterday’s forum.

In the development plan for 2011 to 2016 of the government for MSMEs, he added, one of the major outcomes is the access to finance (A2F).

Bitonio cited that A2F, as pointed out in the plan, is one of the critical factors affecting the competitiveness of the MSMEs and that lack of necessary track record and collaterals deter banks from lending to such sector.

“The funds are available in the market but very difficult to access because either the MSME has limited or no track record at all, no acceptable collateral, no financial records or simply has very little knowledge of business planning and managing,” he stated.

He then noted that IGLF aims to provide for the credit needs of the projects of MSMEs through a guarantee facility that is available to both financial institutions and investment enterprises.

He further cited that lending institutions should be sensitive to the credit needs of the MSMEs in the locality and provide a menu of financing programs that will match such needs.

He added that they should also deliver the credit needed of the sector which is identified as the backbone of the economy at reasonable cost and term in a simplified manner.

The organization also has the grant for research and promotion of MSMEs.

IGLF is also in support of a five-day planning for expanding business training for MSMEs which will be held in Dumaguete from September 3 to 7.