September 15, 2011, 11:35pm
MANILA, Philippines — Small Business Corp. (SB Corp.), the government
financing arm for micro, small and medium enterprises, needs an
additional P1 billion to P2 billion capital next year to be able to
cater more rural enterprises.
Benel P. Lagua, SBC president told a press conference this would
increase their total fund to P6 billion from the current P4 billion.
Lagua said the company may source this additional fund through capital
call from the national government or infusion from the government
financial institutions.
Under RA 9501 otherwise known as "An Act to Promote Entrepreneurship by
Strengthening Development and Assistance Programs to Micro, Small and
Medium Enterprises," the SBC capital has been increased to P10 billion
from P5 billion.
Lagua said that SBC has lagged behind other countries in Asia that also
grant financing assistance to MSMEs.
SBC has also existing loans from three development partners – Asian
Development Bank (P1.4 billion), KFW of Germany (P600 million), and
International Fund for Agricultural Development (IFAD), which is a
United Nation's fund.
The ADB and KFW have been fully drawn. SBC has drawn P200 million
already from IFAD and has remaining P300 million for future drawdown.
Lagua reported that SBC lending in the first half this year has
increased by 35 percent and posted a total of P2.1 billion in total loan
releases compared to just P1.5 billion in the same period last year.
From P1.2 billion loan releases in 2002, SBC lending peaked during 2010
reaching a record high of P4.2 billion and bringing its total loan
funding to MSMEs to P30.9 billion since 2002.
It lends a minimum of P200,000 and a maximum of P5 million. The agency's
largest portfolio is its wholesale lending amounting to P736 million
which was released to 151 partner financial institutions.
"SBC has intensified its partnerships in the banking sector and has also
taken steps in sharing our risk-based lending technology to our partner
financial institutions through seminars and trainings," said Lagua.
Still its best performing lending program is its wholesale microfinance.
From P447.6 million as of June 2010, it is up by 129 percent in the
first half of 2011 reaching a high of P1.03 billion.
Of this total, P22million was released to the country's 19 poorest
provinces through the Rural Micro-Enterprise Promotion Program (RuMEPP),
a 7-year rural microfinance program with funding from the IFAD.
The MSME retail lending also recorded a marked increase of 32 percent
reaching a total of P278.9 million compared to just P211.5 million in
June 2010.
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