Duterte Government Launches P1-B Lending Program To Loan Filipinos Up To P300K Without Collaterals
Following President Rodrigo
Duterte’s directive to replace the “5-6” money lending system and provide an
affordable micro-financing for the country’s micro, small and medium
enterprises (MSMEs), the government’s Pondo sa Pagbabago at Pag-asenso (P3)
program pilots this month in Mindoro, Sarangani and Leyte, among the top 30
poorest provinces, to represent Luzon, Visayas and Mindanao, the country’s
Trade Chief said.
“The P3 is designed to bring down
the interest rate at which micro-finance is made available to micro
enterprises,” said Department of Trade and Industry (DTI) Secretary Ramon
Lopez.
The 2017 General Appropriations Act
has included an initial funding of PhP 1 billion for financial assistance, a part
of the planned PhP 19 billion financing initiative for micro and small businesses
in the next five years.
The program’s fund will be lent out
in the business centers of the poorest provinces (based on poverty incidence),
where the participating microfinance institutions (MFIs) and the Small Business
Corporation (SB Corp.) can operate.
Here’s the List of Some 20 Poorest Provinces in the Philippines:
1. Lanao del Sur (ARMM)
2. Sulu (ARMM)
3. Sarangani (Region 12)
4. Northern Samar (Region 8)
5. Maguindanao (ARMM)
6. Bukidnon (Region 10)
7. Sultan Kudarat (Region 12)
8. Zamboanga del Norte (Region 9)
9. Siquijor (Region 7)
10. Agusan del Sur (Caraga)
11. Eastern Samar (Region 8)
12. Lanao del Norte (Region 10)
13. Mt. Province (CAR)
14. Western Samar (Region 8)
15. North Cotabato (Region 12)
16. Catanduanes (Region 5)
17. Leyte (Region 8)
18. Negros Oriental (Region 7)
19. Zamboanga Sibugay (Region 9)
20. Sorsogon (Region 5)
Here’s the List of Some 20 Poorest Provinces in the Philippines:
1. Lanao del Sur (ARMM)
2. Sulu (ARMM)
3. Sarangani (Region 12)
4. Northern Samar (Region 8)
5. Maguindanao (ARMM)
6. Bukidnon (Region 10)
7. Sultan Kudarat (Region 12)
8. Zamboanga del Norte (Region 9)
9. Siquijor (Region 7)
10. Agusan del Sur (Caraga)
11. Eastern Samar (Region 8)
12. Lanao del Norte (Region 10)
13. Mt. Province (CAR)
14. Western Samar (Region 8)
15. North Cotabato (Region 12)
16. Catanduanes (Region 5)
17. Leyte (Region 8)
18. Negros Oriental (Region 7)
19. Zamboanga Sibugay (Region 9)
20. Sorsogon (Region 5)
An attached agency of DTI, SB Corp.
shall administer the P3 Program, including the creation of a Program Management
Office (PMO), which will open a separate back account for the P3 Program, to
oversee the management and monitoring of fund.
“Fund delivery to micro-enterprises
shall be carried out in either by wholesale lending to non-bank financial
institutions like MFI-NGOs, and cooperatives which shall on-lend the fund to
beneficiaries or by direct lending by SB Corp,” Sec. Lopez said.
Priority beneficiaries include
micro-enterprises and entrepreneurs that do not have easy access to credit, or
are accessing credit at very high cost, such as, micro-entrepreneurs, market
vendors, agri-businessmen and members of cooperatives, industry associations
and co-operators.
Loanable amount per end-borrower
can range from PhP 5,000.00 for start-ups to PhP 300,000.00, with maximum interest
rate of 26% per annum with no collateral requirement. This rate is
significantly below the 20% per day/ week/ month charged by “5-6” lenders. It is
also lower than what is charged by most MFIs.
MFIs may opt for portfolio
guarantee cover of up to 15% of their P3 loan portfolio from SB Corp at a
guarantee fee of 0.4%. The guarantee feature is seen to help MFIs address the
P3 Program’s inherent risk. The guarantee fund will be sourced from the P3
fund.
P3 allocates PhP 100 million for
direct lending by SB Corp. Target loan beneficiaries are the small enterprises
in priority and emerging industries, start-up businesses and technology
innovators.
Minimum loan amount will be PhP 300,000.00 with interest rate capped at 10% p.a., with or without collateral
cover.
“This alternative funding dedicated
for micro and small enterprises is meant to discourage the 5-6 money lending
system in our country,” said Sec. Lopez, adding that through the established
MFIs, the government will reach even the smallest of entrepreneurs in the
country.
Duterte Government Launches P1-B Lending Program To Loan Filipinos Up To P300K Without Collaterals
Reviewed by Yen
on
January 12, 2017
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