Lopez urges MSMEs to avail of gov’t micro financing

Published February 11, 2021, 7:00 AM

by Bernie Cahiles-Magkilat

 Amid an apparent take up of the government micro financing facility, Trade and Industry Secretary Ramon M. Lopez has reiterated his call to all micro small and medium (MSMEs)  that wish to restart or to strengthen their business operations to avail of the Bayanihan CARES lending fund.

“We encourage all MSMEs across the country in all regions to consider taking the step in reopening or reconfiguring their respective businesses. The features of the Bayanihan CARES loan are intended to allow entrepreneurs to restart their businesses with ample elbow room. There is no need to worry about loan repayments for one year. There is also no need to worry about escalating financing costs,” Lopez said.

Trade and Industry Secretary Ramon Lopez. (ALFRED FRIAS/PRESIDENTIAL PHOTO FILE PHOTO)

Lopez made this call amid the apparent slow take up of the collateral-free loan facility offered by Small Business Corp. (SBCorp), the micro financing arm of the DTI.

As of February 9, SBCorp has already approved a total of 21,659 loan applications under the Bayanihan COVID-19 Assistance to Restart Enterprises (CARES) program to provide micro, small, and medium enterprises (MSMEs) with urgent relief needed to restart their businesses amid the pandemic. SBCorp President and CEO Ma. Luna E. Cacanando said these loans equivalent approved loan amount of P2.35 billion. 

“There is currently no backlog on its loan evaluation work contrary to what other reports say. We are even promoting the program to more MSMEs applicants,” said Lopez.

Under the Republic Act No. 11494 or the “Bayanihan to Recover as One Act” (BAYANIHAN 2), which signed into law by President Duterte in October last year, allocated financial support amounting to P10 billion has been allotted to the CARES program to help mitigate the adverse impact of the pandemic on MSMEs.

SBCorp started accepting applications for the Bayanihan CARES Program on October 26, 2020 to help MSMEs recover and ensure that workers have jobs.

Based on the guidelines, MSMEs with Bureau of Internal Revenue-filed financial statements for 2018 or 2019 with no major negative credit track record are assured of a loan under the program.

MSME applicants who cannot submit a BIR-filed FS will just submit their barangay or municipal business permits, photos or videos of business assets, and proof of sales for certain loan sizes.

Loan amount to be granted will be based on the MSME applicant’s asset size and annual sales. However, additional limits to the loan size will be observed to ensure more MSMEs will benefit from the program.

Loans will have a one-time front-end service fee ranging from 4 percent to 8 percent depending on the number of years the applicant will pay.

Loan term can be up to four years and grace period up to six months. Certain industries such as tourism can be granted a longer grace period of up to 12 months.

“Our efforts to provide relief and assistance to MSMEs through the CARES program are further strengthened, especially as we work towards the sustainable and inclusive recovery of our nation. Over 20,000 MSMEs have already benefitted from this loan portfolio, which has helped businesses survive from permanent closure, recover from the effects of the pandemic, save or even create more jobs, and provide income to millions of Filipinos and their families,” said Lopez.

“We have streamlined the application process and made it online to ensure that more businesses are able to avail of this service. SBCorp completes its evaluation of loan requests within 7 working days, even faster if the documents are complete. Submission of documents such as BIR tax return can fastrack approval.

The trade chief emphasized that MSMEs are a key pillar of the country’s economy, which

contribute 35.7 percent to GDP, employ 62.5 percent of the labor force, and constitute 99.5 percent of all business establishments in the country.

To comply with social distancing measures and to reduce physical contact, Lopez said SBCorp has adopted a completely online loan application and evaluation process, except for occasional phone verifications. The loan releasing process has likewise shifted online, unless physical signing is preferred and requested by the approved loan applicant.

In addition, DTI, its provincial offices, and Negosyo Centers spread out across the country are

also available to support small entrepreneurs in the regions. Business owners may head to any of the offices or may opt to send their concerns through the available online portals.

Interested business owners may submit their loan requests through www.BayanihanCARES.ph.

Applicants may also contact the CARES Hotline at 8651-3333, and at 1-800-10-651-3333 (nationwide toll-free) for inquiries.