DTI: MSMEs still shun financial firms’ offers

Micro, small and medium entrepreneurs seeking for financial assistance through credit from financial institutions are urged to examine their capabilities to borrow, as access to finance is no longer a problem.

Department of Trade and Industry ( DTI- 7) regional director Asteria Caberte made this pronouncement as she noticed that there are a lot of financial windows available, but MSMEs are still not availing them.

"I believe there is still a mismatch among capitalists and financial institutions. Maybe the product or the borrower's bankability is a problem," said Caberte.

In a separate interview with Cebu Chamber of Commerce and Industry ( CCCI) president Ma. Teresa B. Chan, she said that the chamber is going to expand its partnership with financial institutions to effectively fill in the mismatch between the industry players and the financing providers.

Despite the favorable interest rates, and the opening of banks and other financial institutions to credit, majority of the SMEs as well as the micro and cottage industries, are still suffering from lack of capitalization resources.

Already, the chamber has made special partnerships with various resource providers; such as SB Corporations, Cebu Bankers Club, SGV, PhilExport, and Department of Trade and Industry's shared service facilities to ensure assistance to emerging industries and MSMEs.

Last year, CCCI has signed a memorandum of agreement with SB Corporation, together with PhilExport- Cebu to recommend and enlist entrepreneurs or businesses that need financial assistance to grow their operations, amid the pressure of intense competition with the entry freeflow entry of products and services under the ASEAN Economic Community set up.

SB Corporation, a state- run financial institution, opened its direct lending facility even to businesses that cannot comply with the much stricter documentary requirements.

Despite this opening, Chan said micro and small businesses have continue to hold onto their fears of being rejected, and instead continue to bear the burden of paying high interest rates to informal lending sector.

Chan added that with massive information campaign on the availability of the credit line offered even to non-members of the chamber, is needed in order for businesses to be protected from loan sharks.

Aside from the P40 billion total allocation for SB Corporation's direct lending facility, private banking institutions are also opening their doors to corporate borrowers. In fact, most banks are now offering attractive loan packages specifically designed for Small and Medium Enterprises.

Cebu Bankers Club president Gino Gonzalez bankers in Cebu are going to reach out to the Small and Medium Entrepreneurs to address the gap between financial institutions and the industry players in terms of accessing credit facilities. —