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Gov’t loan fund for MSMEs short by P2B

23,000 entrepreneurs seeking more than P3B in assistance
/ 04:06 AM July 21, 2020

Tens of thousands of micro and small businesses (MSMEs) want to borrow more than P3 billion from the Department of Trade and Industry (DTI) to help them cope with the pandemic, but the government agency is already stretching its pockets to loan out at most P1 billion.

The DTI tapped its attached agency to lend a P1-billion fund for micro and small enterprises whose operations got disrupted because of the pandemic. The DTI called this last March the COVID-19 Assistance to Restart Enterprises (CARES) program.

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However, the P1-billion fund, the Inquirer learned, was not allotted based on the amount micro and small business owners might need to see their operations through the pandemic.

Instead, this was what Small Business Corp., a DTI-attached agency, could afford.

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Additional funds

“The P1 billion is not determined based on what we are expecting [as] the amount of help needed by [micro and small enterprises]. It’s not like that,” said Frank Lloyd Gonzaga, group head of planning and advocacy in SB Corp.

“It’s only P1 billion because that’s the only money that we can afford right now. That’s our only money now. Whatever amount we can lend, we already put it in the [CARES program],” he said in a phone interview with the Inquirer on Monday.

The average loan size sought by applicants across the country was around P130,000, Gonzaga said.

Admittedly, P1 billion could only do so much, when out of more than a million registered enterprises, more than 90 percent are considered small and micro businesses.

It is not yet clear where else SB Corp. would source additional funds and by how much. Earlier this month, Trade Secretary Ramon Lopez told reporters that the applications back then needed more than P2 billion worth of loans.

Other sources

He said that the DTI was in talks with Land Bank of the Philippines and Development Bank of the Philippines for funding.

He added that the DTI could tap P3.5 billion from another Small Business Corp. program called the Pondo sa Pagbabago at Pag-asenso or P3, which was launched in 2017 to give businesses an alternative to loan sharks.

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However, it is not yet clear if this P3.5 billion had not yet been previously loaned out by SB Corp. to micro finance companies.

He did not give new updates on Monday when asked for more information.

Nevertheless, more businesses need help. The loan in demand has already ballooned to P3.38 billion after 23,447 businesses applied for the CARES program, according to the trade chief’s online presentation at the National MSME Week E-Forum on Monday.

“Don’t worry. We’ll have other sources for the balance,” he said at the forum. INQ

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