DTi wants more private partners for MSMe loan access

The Department of Trade and Industry (DTI) is seeking more private sector partners to enable more micro, small and medium enterprises (MSME) to get access to loans under the Pondo sa Pagbabago at Pag-asenso (P3) micro lending program.

During the P3 Credit Delivery Partner Forum held earlier this week, Trade Secretary Ramon Lopez encouraged rural banks and cooperatives to partner with government to expand the reach of the P3 program.

Under the P3 Program administered by the DTI’s financing arm Small Business (SB) Corp., micro enterprises can borrow P5,000 up to P200,000 based on their requirements and repayment capacity without the need to provide collateral.

In addition, the interest rate and service fees for the loans do not exceed 2.5 percent per month.

The P3 Program was set up in line with the directive of President Duterte to serve as an alternative to the “5-6” money lending system.

Many people who borrow though the “5-6” money lending system fall into a debt trap for while they can get loans without collateral or any documentary requirement, they have to pay exorbitant interest rates of 20 percent or even higher.

Earlier, Lopez said the DTI would push for a bill to institutionalize the P3 program.

Under the bill, there would be a regular fund for the program to be sourced through the General Appropriations Act.

Recognizing the need for P3, Senator Aquilino Pimentel III has expressed his support for the program and committed to work on institutionalizing it to make it easier for MSMEs to access loans especially in the countryside.

To date, the P3 Program has assisted more than 89,000 MSMEs.

The DTI wants to promote and provide support to MSMEs as they account for bulk or 99.56 percent of all registered businesses in the Philippines, as well as for 62.9 percent of the country’s total employment.