BACOLOR, Pampanga--Few small and medium enterprises (SMEs) have availed of the P2-billion loan window launched by the Development Bank of the Philippines last year, an official said.

Only 96 loan applications, amounting to P364 million, have been filed, according to Eric del Rosario, manager of the DBP's SME department.

At least 12 applications worth P15.96 million have been approved and the DBP has so far released P14.1 million, Del Rosario said at the 2008 Central Luzon One Town One Product (Otop) Conference here on Thursday.

Intended to support the Otop program of the Department of Trade and Industry, the P2-billion loan facility has been allotted to the regions at an average of P100 million to P150 million, he said.

Asked why few SMEs have tapped the DBP loan window, Del Rosario said: "We're still instituting it [in the regions]."

Stringent processes, including numerous documentary requirements, make SMEs shy away from the DBP facility, said DTI regional director Blesila Lantayona, citing reports from the SME Development Councils (SMEDC) in the region's seven provinces.

Del Rosario said the processes and requirements are being reviewed. DBP's interest rates are low, ranging from 8 to 10 percent, he said.

Teresa David-Carlos, chair of the Pampanga SMEDC, confirmed the difficulties of SME to get access to financing.

In her presentation at the conference, she said, "most SMEs do not qualify in bank requirements such as collateral, equity, documentation, minimum loanable amounts."

Rural entrepreneurs, in particular, have asked that cash flow be made a basis instead. They have not availed of large loans because they are not yet prepared to handle big amounts, she said.

The high interest rates of private banks shun them away, while grants are only made available to organized or informal sectors, she said, citing results culled from consultations.

Carlos said the Small Business Corp., a private institution helping SMEs, cited breakthroughs in the SMEs lending environment.

"We have a policy environment that is more supportive of a financial system that is more inclusive of SMEs," SBC paper said. It said that for SMEs, the Bangko Sentral ng Pilipinas has put up the Inclusive Finance Advocacy Group and Financial Specialist Group and issued circulars favorable to SMEs.

SBC has advocated for a risk-based lending movement in the country.

Financing is not the only concern of SMEs, based on reports presented in the conference.

Lexes Sychangco, chair of the Bataan SMEDC, said there is a lack of awareness on the barangay micro business enterprise (BMBE) law at the level of some local governments in the region. The results are lack of support and delayed assistance.

SMEs also reported long processing time and issuances of permits and licenses, Sychangco said.

Food-making businesses, especially in Pampanga and Bulacan, said it was difficult to get license to operate from the Bureau of Food and Drugs.

Violy Luna, Bulacan SMEDC chair, reported the need to improve access to markets through additional roads, networking support, studies of trends in the market and creative strategies.

Lantayona said 156 SMEs have enrolled in the export pathways program. Local governments have been subsidizing the participation of SMEs in international trade fairs.