DBP earmarks P200M for microfinancing

The Development Bank of the Philippines (DBP) has allocated P200 million for lending to the manufacturing and agri-business sectors in line with government’s emphasis on microfinancing.

The multi-million peso lending facility is in line with the administration’s policy of making available financing to the countryside, especially for poverty alleviation.

However, DBP officials said the loan facility would involve multi-financing institutions (MFIs) in providing small enterprises direct access to credit and banking services.

"That includes training, market assistance, and business consultancy to hasten growth and development," they added.

The principal source of funds will be the Kreditanstalt for Wiederaufbau Credit Line for Small and Medium Enterprises (Kfw-CLSME) of Germany.

DBP president and chief executive officer Remedios L. Macalincag said that eligible borrowers are MFIs like rural banks, cooperative banks, thrift and savings banks, development banks and commercial banks. Likewise, the non-banking MFIs that are eligible borrowers are savings and loan associations, non-government organization in microfinancing, credit unions, and cooperatives.

"This program complements the financing facility of the People’s Credit and Finance Corp. (PCFC) which is a financing institution which extends loans also to MFIs for livelihood projects directed for the poor," Macalincag said.

She added: "The bank’s microfinancing program seeks to strengthen the capability of the PCFC’s program through assistance to micro-enterprises that have the growth potentials and which require bigger funding to graduate from PCFC’s assistance."

Micro-enterprises can draw a maximum amount of P150,000 payable in a maximum of three years. The amount that can be extended to an MFI depends on its funding requirement. – Ted Torres