The Social Security System has set aside P7 billion for lending to private businesses and social institutions, which is meant to help boost employment and boost economic growth.
SSS president and chief executive Emilio de Quiros Jr. yesterday said the newly established business development loan facility (BDLF) and social development loan facility (SDLF) were targeted at those wanting to expand their businesses or embark on community projects.
The BDLF caters to businesses of all sizes —micro, small and medium enterprises (MSMEs) and even large concerns.
The SDLF provides funds to social institutions that offer education and training programs like running schools and hospitals.
Of the total amount that will serve as a revolving fund, P1 billion will be available for initiatives related to the agriculture, fishing and forestry sector; P2 billion for the industrial sector—particularly construction, manufacturing, utilities, mining and quarrying; and P4 billion for the services sector.
“The new SSS lending facilities enable us to offer financial assistance to a wider range of projects and borrowers. Cooperatives, non-government organizations and even barangay micro business enterprises or ‘BMBEs’ can also borrow,” de Quiros said.
“Our enhanced loan guidelines are more flexible and responsive to borrowers’ needs,” he said. “For example, we removed various caps on the loanable amount (which) will now depend on the project’s actual need and the borrower’s credit capacity, provided it will not exceed P500 million.”
The SSS chief said funds would be disbursed to borrowers through a conduit arrangement with participating financial institutions.
“Borrowers can pay in monthly, quarterly, semi-annual or annual amortization of up to 15 years with the interest rate depending on prevailing market rates,” he said. “Borrowers have a one-time option to switch from a variable interest rate that is adjusted every six months to a fixed rate that applies for a period of three years.”