Arroyo eyes cut in interest on small business loans
By Christine Avendaño
Philippine Daily Inquirer
First Posted 01:19:00 02/08/2008
MANILA, Philippines -- President Gloria Macapagal-Arroyo has ordered a study on the feasibility of cutting interest rates on government loans to micro, small and medium-scale enterprises (MSMEs), an official said Thursday.
Presidential Management Staff Cerge Remonde said t he had asked officials involved in lending to MSMEs to do the study after the President issued the directive.
“Only last week I was telling them to find ways and means to bring down further the interest rates that we can charge so that really this can be more attractive to people,” Remonde told reporters at a news briefing.
Remonde, who is the oversight official for MSME development, said President Arroyo issued the directive because of “her desire to have the program reach and help more people.”
Government financial institutions in a program called SME Unified Lending Opportunities for National Growth charge interest of 9.0 to 12.0 percent per annum, said Benel Lagua, president of the government’s Small Business Guarantee and Finance Corp.
Loans to micro-enterprises carry 10-12 percent, said Edgar Genoroso, president of the government’s People’s Credit and Finance Corp.
Micro-enterprises usually borrow P5,000 to P10,000 but can go as high as P50,000. Small and medium-scale enterprises (SMEs) borrow P200,000 to P5 million.
Lagua said his office was trying to negotiate with the Department of Finance to cut its cost of money. “Once we are able to do that, we will pass it on to our SME borrowers,” he said.
Genoroso said his office had to consider “our cost of funds.” Edited by INQUIRER.net
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