Lip service promises of easy fund access upsets MSMEs

CEBU, Philippines - Despite loud pronouncements from both private and state-run financial institutions to open up credit access for MSMEs to help pump prime inclusive growth, until this day the statements were nothing but “empty promises.”

"This has become a frustration of our MSMEs and is an obstacle to achieving our country's development goals," said Mandaue Chamber of Commerce and Industry president Glenn Soco.

Soco said amid the low interest rates, swelling cash flow in the country, and the series of pronouncements to aid budding and homegrown businesses to take advantage of the succulent market, "so far nothing has changed."

"MSMEs still finds it hard to obtain loans from the banks and other financial institutions," said Soco who owns Coffee Dream chain of coffee shops, and other businesses.

According to Soco, the Chamber is calling the present administration to fast track its plan to provide easier credit access for MSMEs.

"We need to take advantage of our good economic conditions and low interest rates," stressed Soco adding that inclusive growth and stronger economic backbone can only be achieved if the bottom is properly built.

Recently, Security Bank announced its stance to connect further with the SMEs in the Philippines, by offering wider and easier choices of credit facilities.

"We hope to accelerate growth of our retail banking business as well as better coverage of the SME sector. With BTMU’s expertise in project finance, we expect to participate more actively in PPP and infrastructure projects," said Security Bank president Bank president and chief executive officer (CEO) Alfonso L. Salcedo in his recent visit to Cebu.

Earlier, the Export Development Council (EDC) announced that it is looking for ways on how to solve the concern of easier financial access to exporters, as the  Philippine Export Development Plan (PEDP 2015-2017) is about to expire.

In a statement, EDC deputy executive director Emma Mijares said that the organization is proposing a 10-year extension of the PEDP.

"We are gainfully getting the support of some congressmen," she said adding that the council is likewise pushing hard for the approval of this proposal in the 17th Congress.

Part of PEDP's call is to require government institutions tasked to assist exporters in their financing requirements to "step up in extending credit guarantees" and to explore new sources of credit.

Other actions the EDC intends to take, according to Mijares is to seek assistance and cooperation from international financial institutions such as the World Bank and Asian Development Bank for long-term SME financing projects.

"We will need the help of the private sector on what projects to pursue," said Mijares.

PEDP stated that exporters should be given more access to finance to help them diversify markets, improve their competitiveness, and enhance the quality and range of their merchandise.

Soco hopes that these pronouncements are not merely "lip service, and empty promises". (FREEMAN)