Gov’t to provide add’l P10B for microfinancing

Backing its policy pronouncement on promoting small and medium enterprises, the government will provide an additional P10 billion for micro-financing over a 10-year period, Trade and Industry Secretary Cesar V. Purisima said yesterday.

The additional funding, Purisima said, would create three million micro-enterprises.

"The planned P10 billion would be on top of the funds already provided under the SME Unified Lending Program for National Growth (SULONG)," the DTI chief said.

A micro-enterprise is a business with a capitalization of less than P1.5 million.

A small enterprise is a business with a capitalization of less than P15 million, while a medium enterprise has a capitalization of less than P50 million.

According to Purisima, government is allocating P1.5 billion for micro-financing which will hopefully create 300,000 new micro-enterprises.

To date, government’s active loan portfolio for micro-enterprises stands at P2.5 billion.

Next year, government expects to create an additional 500,000 micro-enterprises with the availability of micro financing.

Under the SULONG program, government has lent out P26.7 billion.

President Arroyo had earlier ordered the DTI to triple lending to SMEs and to create an undersecretary position to look after SMEs.

Purisima, for his part, is also pushing for the creation of an SME credit bureau that would check on the financial viability of SMEs. SMEs comprise 99 percent of all businesses in the country and employs 70 percent of the labor force, but only contributes 32 percent to the economy.