Anti-'5-6' drive stalled; funding unavailable

TACLOBAN CITY – Non-availability of funds has stalled the pilot implementation in this city of a new financing program meant to kill the 5-6 lending scheme.

The Department of Trade and Industry (DTI) confirmed their financing arm, the Small Business Corporation (SBC), had stopped accepting loan applications pending the additional releases for the Pondo sa Pagbabago at Pag-asenso (3P) from the Department of Budget and Management.

The national government, according to DTI Regional Director Cynthia Nierras has disbursed P3.8 million for SBC offices for pilot implementation in three areas - Tacloban for Visayas; San Jose, Occidental Mindoro, for Luzon, and Alabel, Sarangani, for Mindanao.

In this city alone, the SBC disbursed nearly P940,000 in loans for market vendors during the launching.

“The initial funds have already been used. Our advice to potential borrowers is to just wait or go to the accredited MFIs (micro financing institutions) to avail of loans,” said DTI Regional Director Cynthia Nierras.

Nierras does not know when the additional micro financing loans will be released.

During the P3 launching last February 9, SBC turned over P43 million to eight MFIs and cooperatives in Leyte province.

The MFIs are Taytay sa Kauswagan, Omaganhan Farmers Multipurpose Cooperative, Lanang Multipurpose Cooperative, Zaragosa Agrarian Reforms Cooperative, Samahang Pangkabuhayan ng Riverside Multipurpose Cooperative, Libercon, CARD Bank, and Radiowealth Financing Company.

For direct retail lending from SBC, the trade department had set up an office inside the city government-run building within the market complex to process applications.

President Duterte earlier announced the government is setting aside P1 billion for the initial implementation of P3 in poor provinces as part of the crackdown on 5-6 lending.

The 5-6 scheme issues small loans at a 20 percent interest rate. Payments are collected on a daily or weekly basis.

Nierras said P3’s direct retail lending will eventually be expanded to poor provinces in the region - Leyte, Samar, Eastern Samar and Northern Samar.

Loan amounts to end-borrowers will be from P5,000 to P175,000, at a maximum interest rate of 2.5 percent per month without collateral. (PNA)