Trade chief bats for easy MSME loans

Government-owned lender Small Business Corp. (SBC) is now offering more ways for businesses to qualify for loans, with P10 billion available in funding for micro, small and medium enterprises (MSMEs), according to Acting Trade Secretary Cristina Roque.

Roque said that borrowers can now qualify for a loan from SBC—a government financial institution mandated to assist MSMEs in finance, training, marketing and other areas—without needing a collateral.

“We have to realize that these MSMEs don’t have collateral. So, when I became the [chair], we changed; we added more ways for the MSMEs to be able to [get a] loan,” she said during a conference organized by the Philippine Chamber of Commerce and Industry.

The trade chief and SBC chair said that borrowers could get fresh funding through purchase order financing, check rediscounting and receivables factoring.

Roque said that the loan applications process today takes about 19 days, which her office is seeking to shorten to one week.

In a separate interview with the Inquirer, SBC president and CEO Robert Bastillo said that they have about 10,000 to 15,000 new borrowers every year.

Overall, they have about 60,000 firms with outstanding balance to date.

On the average, these firms are applying for a loan of P200,000, said Bastillo.

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Since she took the reins in the DTI, Roque has expressed her thrust to promote and develop the MSME sector, citing its importance and contribution to the country’s economy.

She said that the DTI would implement a five-point plan in developing the sector, which includes the utilization of artificial intelligence and digitalization, diversification, funding, franchising, mentoring and providing strategic learning.

In the Philippines, MSMEs make up the majority of businesses, comprising 99.51 percent of total, according to 2020 data from the Philippine Statistics Authority.

Back in 2021, there were at least 7,000 registered MSMEs in the Philippines, based on DTI data.