DTI in talks with pawnshops to distribute P1B loan fund

The Department of Trade and Industry (DTI) is in talks with pawnshop operators to make their shops among the channels of the P1-billion Pondo Para sa Pagbabago at Pag-asenso (P3) funds.

DTI, in its official Facebook account, said that Trade Secretary Ramon Lopez discussed with the Chamber of Pawn Brokers of the Philippines (CPPI) last May 9 the possible partnership to make the government’s loan program for entrepreneurs more accessible.

CPPI President Jean Henri Lhuillier said the Chamber is interested in supporting the P3 program by serving as conduits.

“P3 is a microfinancing program that aims to end the usurious ‘5-6’ scheme and help the micro, small and medium enterprises get easier access to financing services, providing non-collateral loans with a low interest rate of 2.5 percent every month,” said DTI.

At present, the trade agency taps the government-owned Small Business Corp. (SB Corp) in the distribution of the funds.

Payments in the P3 program, said DTI, will also be “easy” and “flexible” as individuals can pay either weekly or monthly.

For his part, Lopez said he is optimistic about the partnership since this will expand the program’s network through pawnshops across the country.

Data from the Bangko Sentral ng Pilipinas (BSP) show that there are 358 registered pawnshops and money exchangers combined in the country as of December 2016. There are over 16,000 pawnshops in the Philippines, higher than the total number of banks combined.

In addition, a 2012 survey of the central bank also revealed that 72 percent of Filipinos have gone to pawnshops in the 12 months before the survey, not only to pawn a property, but also to pay bills or send or receive remittances.

In the same DTI report, SB Corp. President Brillo Reynes said that the P3 program is “on track,” distributing P60 million funds in Mindoro alone.

DTI said it already rolled out the program to the country’s 30 poorest provinces. While Cebu is one of the most affluent provinces in the country, DTI Cebu Director Maria Elena Arbon previously said her office is awaiting the funds to benefit Cebuano micro and small enterprises, too.

Under the P3 program, an entrepreneur can loan P5,000 to P100,000 with no collateral.