SBCorp imposes interest rates on loans to MSMEs
THE Small Business Corp. (SBCorp), the finance arm of the Department of Trade and Industry (DTI), recently announced that it has imposed an interest rate on loans made to micro, small and medium-sized enterprises (MSMEs).
At the launch of a new flagship lending program, SB Corp showcased its new online lending facilities available to multi-sector MSMEs.
Previously, with the Bayanihan Cares program, launched by SBCorp at the start of the pandemic, the loans did not bear interest rates but charged a 4% annual service fee. The recently launched scheme, meanwhile, imposes interest rates on loans, with SBCorp claiming this is due to the lack of funds to support loans to MSMEs.
SBCorp President and CEO Luna E. Cacanando explained that the “Bayanihan Cares” loan program offers zero interest rate as it has 8 billion pesos of funds provided by the national government.
However, Cacanando said, that fund is nearly depleted.
“‘Yung pondo na yun paubos na nga. So yung gagamitin ngayon ng SBCorp na pondo, sariling pondo kung saan kelangan din po natin magbayad ng ating mga employees to eat mga gastusin para sa pagpapalakad ng program Nope.” [SBCorp will now use its own fund where we also have to pay our employees, our expenses for running these programs.]
“We are a national GOCC budget kasi wala tayong every year,” Cacanando further explained. “As GOCC, we have to cover our expenses for all our income. So, gusto po natin maaging sustainable English SBCorp. Hindi po tayo pwedeng magkaroon ng negative income or malugi kasi this is not an acceptable practice as a GOCC,” [We cannot have a negative income or go bankrupt because that is not an acceptable practice as a GOCC.]
With that, Cacanando said the government-owned and controlled corporation (GOCC) should charge “reasonable” interest rates compared to banks and other lending institutions for loans to MSMEs.
She said SBCorp’s 1% monthly interest rate was the most reasonable.
“Pinakamura na’yung 1 percent per month at the base po to decreasing balance, it’s really more about durability para tuloy tuloy para rin ‘yung loan programs,” she added. [SBCorp is trying to make our interest rate very reasonable and compared to the bank and others who lend to MSMEs, the cheapest is 1 percent per month and based on diminishing balance, it is really more of sustainability to continue still the lending programs.]
The three sub-programs mentioned under the newly launched lending program are: multi-purpose loan for multi-sector MSMEs; Rise Up Turismo; and, Ready Rise Up Tindahan. The newly launched lending program has been given the name “Rise Up”, which stands for “Resilient, Innovative and Sustainable Businesses: Unleash Your Powers”.
The multipurpose loan covers all MSMEs, including current SBCorp borrowers. The Turismo loan, on the other hand, includes MSMEs engaged in tourism activities, regardless of their accreditation. The Tindahan loan consists of sari-sari stores, retail stores, resellers and distributors as part of a fast moving consumer goods (FMCG) industry partner network.
The multi-purpose loan sub-program consists of a multi-purpose micro-loan, to first-time borrowers and suki. This sub-program covers MSMEs with at least one year of work experience and a loan requirement of up to P300,000.
A first-time borrower is an MSME with at least 3 years of work experience and a loan need of more than P300,000. It requires submission of financial statements filed with the Bureau of Internal Revenue within the last three years.
The “sukiThe loan is for existing SBCorp borrowers in good standing with a repayment history of at least 6 months.
Requirements for loans below P300,000 are as follows: government issued ID; barangay business license; photos and videos of commercial operations; and corporate documents, if applicable.
For loans over P300,000, the requirements are: government issued ID; BMBE Certificate or Mayor’s Business Permit; photos and videos of commercial operations; and, corporate documents, if applicable.
The “Rise Up Tindahan” sub-program provides loans to FMCG accredited sari-sari stores and FMCG accredited retail stores, resellers and distributors.
FOR Micro Tindahan Loan, the loanable amount is up to P300,000. For Tindahan SME loans, the loanable amount is up to P5 million. The “Tindahan” (store) category offers a grace period of up to 12 months on the principal amount.
Requirements for the loan include: government-issued ID; barangay business license for loans up to 100,000 pesos; photos and videos of business operations and assets; corporate documents, if any; and, FMCG reference number.
The requirements for Tindahan SME loans are as follows: government issued ID; mayor’s permit; corporate documents (i.e. secretary’s certificate); FMCG approval number; and, proof of asset size not exceeding 100 million pesos.
Rise Up Turismo, on the other hand, consists of primary tourism businesses, secondary tourism businesses and tourism support services.
Major tourism businesses include, but are not limited to, hotels, resorts, apartment hotels; adventure and/or sports facilities; and ecotourism facilities.
Secondary tourism businesses include, but are not limited to, restaurants, tourism training centers, tourist shops, and zoos.
Tourism support services include, but are not limited to, fast food outlets, restaurants, cafes and drinking places, pastry shops and food vendors.
“Rise Up Turismo” provides a loanable amount of up to 5 million pesos, a grace period of up to two years, without interest or collateral.
According to SBCorp, it has approved loans amounting to 3.77 million pesos.
“Rise Up” is a loan program that aims to sustain the gains of MSMEs who have survived the last two years of crisis, by providing versatile loans on favorable terms and easily accessible, documents from SBCorp have revealed.
SBCorp is a non-banking government financial institution established in 1991 under the Magna Carta for MSMEs (Republic Act 6977 as amended by RA 8289 and RA 9501).
It falls under the policy agenda and administrative oversight of the DTI MSME Development Council.
The finance arm of the DTI is mandated to engage in development initiatives for MSMEs, implementing comprehensive policies and programs to assist MSMEs in all areas including but not limited to , financial and information services, training and marketing.
He is also the implementer of the Bayanihan Cares program, the program to help affected MSMEs during the pandemic.
Under Bayanihan 2, the government has earmarked 8 billion pesos for the loan assistance program for MSMEs. Of this amount, 4 billion pesos went to the DTI while 4 billion pesos was earmarked for the Ministry of Tourism.