Unified loan program for SMEs pushed

The Department of Trade and Industry (DTI), along with the Bangko Sentral ng Pilipinas (BSP) and various government financial institutions (GFIs), is designing a unified lending program for small and medium enterprises (SMEs).

Trade and Industry Secretary Manuel Roxas II said yesterday that the unified lending program, which will be called SME Unified Lending Program for National Growth or SULONG, will make it easier for small and medium-sized businesses to secure bank loans.

Government is eyeing a loan fund of between P20 billion and P30 billion for SMEs.

Roxas met recently with the BSP and the various GFIs to discuss the proposed standard requirements for the accreditation of thrift and rural banks which will be used as channels for SME funding.

The BSP and the GFIs are also designing a standard loan application form for the borrowers.

Two types of loans would be made available under the program: Short term which is payable in one year and long term which is payable up to five years.

The unified lending scheme is in addition to existing financial services of the participating GFIs.

Roxas disclosed that under SULONG, a loan will not be declined only on the basis of inadequate collateral.

"But the borrower must be willing to pledge all available business and personal collateral including assets to be acquired from the loan as well as issue post dated checks and assign his her life insurance to secure the loan," Roxas said.

For franchisee, a corporate guarantee and assignment of lease rights may be sufficient depending on the amount of loan being secured.

A small enterprise is defined as those having a capital of below P15 million, while a medium enterprise are those with a capital of P60 million and below.

A micro-enterprise are those with a capital of P1.5 million and below.