Helping small Cebu businessmen get access to bank loans is one of the aims of president Prudencio Gesta of the Cebu Chamber of Commerce and Industry.
Before his term ends in March, he said on Monday, he plans to undertake this project with the Rural Bankers Association of the Philippines (RBAP) Cebu chapter which he hopes will join the chamber.
“We have been asking them to be a sectoral member of the chamber so that we can start the project that will make loans accessible to for our micro-lenders,” said Gesta, who is first vice president of Rizal Commercial Banking Corp.
To increase membership in the chamber, they identified the need to strengthen the banking sector.
“That is why we are pushing for a stronger relationship between the chamber and banks to become a link especially for small businessmen who currently borrow from informal lenders that offer higher interest rates,” Gesta said.
Most small businessmen in downtown Cebu borrow money from “5-6” lenders that charge 20 percent interest up front or 240 percent interest a year.
“Banks provide lower interest rates but most vendors and small businessmen don’t have easy access. They usually go for what is immediately available despite the very high interest rates,” Gesta said.
If the RBAP-Cebu joins the chamber, CCCI will start to work with them on this project to bridge the gap between formal lenders and micro-enterprises, he said.
“The chamber will help in the coordination between (Carbon) market vendors and members of the RBAP-Cebu first through information campaigns and finding out what kind of terms are doable for both vendors and banks,” said Gesta.
Gesta said the Carbon market vendors’ association could help screen the loan applications of their members and endorse them to the rural banks with the help of CCCI.
As a banker, Gesta said that today is the right time for small businessmen to avail of loans because most banks have high liquidity and the economy has many promising growth opportunities across all industries and sectors.
“In tourism alone, one can start a small business that will tap the tourist market in Cebu. All they need is good funding that they can pay in terms that are doable for them and the banks are the best institutions to provide that,” said Gesta.
The CCCI has 670 members including 21 sectoral members, which Gesta hoped RBAP would be a part of.