MANILA, Philippines — Funds for loans to assist micro, small and medium enterprises (MSMEs) adversely affected by the coronavirus disease 2019 (COVID-19) pandemic is not enough for the entire year, the Small Business (SB) Corp. said Wednesday.
Under its COVID-19 Assistance to Restart Enterprises (CARES) program, the SB Corp. has a total of P1 billion worth of funds to assist small businesses. SB Corp. is the financing arm of the Department of Trade and Industry (DTI).
SB Corp. President Luna Cacanando on Wednesday said it will finalize 7,000 loan applications by June 30, however, the agency estimates its potential borrowers to be more than 10,000.
If all 10,000 small businesses are to apply for loans, this would need a budget of about P1.37 billion.
“We should be able to complete the approvals within July at by August ubos na po ‘yun, in fact September to December, wala na kaming pondo na maipapautang para sa enterprises,” Cacanando said during a House hearing.
(We should be able to complete the approvals within July and by August the funds will be all spent. In fact, from September to December, we won’t have funds to loan to small businesses.)
Lawmakers, however, chided the agency for its slow disbursement of loans and its 6% service fee for loans.
They noted that from 10,000 applications, the SB Corp. was only able to review and approve 12 loan applications.
Manila Teachers party-list Rep. Virgilio Lacson said the agency must revisit its program as it needs to ramp up its dissemination campaign.
Kita naman, from 10,000 inquiries pero bumagsak kayo ng loan release niyo is 12 loans. Napakalaki ng discrepancy, there’s something wrong, you have to revisit your program,” he said during the hearing.
Meanwhile, Deputy Speaker Deogracias Victor Savellano urged SB Corp. to lower its service fee from 6% to 2%, since its funds are under the national budget.
Savellano added that SB Corp. should also tap rural banks to release funds for small businesses.