SB Corp to lend MSMEs to pay for 13th month pay

Published October 21, 2020, 7:30 AM

by Bernie Cahiles-Magkilat

Trade and Industry Secretary Ramon M. Lopez has proposed to share P4 billion out of the P10 billion allocation from the Bayanihan 2 as soft loans to micro, small and medium enterprises (MSMEs) to pay for the 13th month pay of their workers.

This was revealed by Department of Labor and Employment Secretary Silvestre Bello III at the Laging Handa briefing that Lopez has conveyed his agency’s willingness to allocate P4 billion from the P10 Bayanihan allocation for SB Corp., the government’s micro financing arm attached to the DTI.

Under the Bayanihan 2, the DTI got a P10 billion allocation, including P6 billion for the tourism and tourism related establishments. All these loan facilities for the MSMEs carry minimal interest rate.

Lopez later told reporters covering the DTI that his proposal is to grant a soft loan to the MSMEs based on the requirements of the SB Corp’s using the same requirements for its COVID-19 Assistance to Restart Enterprises (CARES) Program.

 As of August 17 this year, SB Corp. has started CARES 2 Program online Borrower Registration System (BRS) to further facilitate the grant of economic relief program for MSMEs affected by the COVID-19 pandemic.

The loan features of CARES include loan limit, zero interest rate, service fee, grace period and repayment term. The same identification and business registration documents are required.

For ease of loan release as well as to reduce physical contact and minimize community transmission of COVID-19, loan applicants requesting loans more than P 30,000 are required to have a bank account where the SB Corporation will deposit the loan release proceeds. The bank account should either be Land Bank of the Philippines or any PESONet or InstaPay participating banks.

For loan applications P30,000 and below, electronic money accounts (EMA) such as GCash and PayMaya may substitute the bank account requirement.

The bank/EMA account must be under the name of the loan applicant. Loan applicants will not be able to proceed with their online application without their bank/EMA account details. Moreover, the SB Corporation will not allow a change in bank/EMA account details during the loan release phase, relative to what is indicated in the online loan application.

MSME  loan applicants will also be required to submit the following during the online application: 3 photos of the enterprise’s operations and fixed assets, inclusive of business signage.

In case the loan applicant has an outstanding negative credit track record with any financial institution (FI) prior to the Covid-19 pandemic, an approved payment arrangement with subject FI should be first secured. Otherwise, the loan application will be automatically denied.

The SB Corporation is committed to deliver the much-needed assistance of affected micro and small enterprises while making sure that the barest minimum standards the lending guidelines are observed and complied with. Hence the further streamlining of processes towards this end.

 It could be recalled that the Employers Confederation of the Philippines said that employees of micro enterprises might not get their mandatory 13th month pay because these enterprises have long closed their operations due to the prolonged lockdowns. 

ECOP President Sergio Ortiz-Luis Jr. estimated there are 2 million employees of micro enterprises that might not be given their Christmas bonus or the 13th month pay.