MANILA, Philippines - Indian businessmen in the Philippines are urging their fellow countrymen practicing “5-6” money lending to legalize their business to remove the negative tag Filipinos associate with the scheme.
Federation of Indian Chambers of Commerce president Rex Daryanani said the group is currently in discussions with the government and other stakeholders on the details and guidelines on how the 5-6 money lenders could formalize their business in the country.
“We have the initial guidelines but is still for polishing so we’re hoping that by early March we will already have the guidelines,” he said.
“I spoke to President Duterte and I appeal to him to legalize the money lenders and their businesses. They have no formal registration for their lending business and that’s really the problem. The President has already given the go-signal on legalizing them,” Daryanani added.
Based on the initial guidelines, Daryanani said one can be given a lending permit provided he has an initial capital of at least P1 million.
According to Daryanani, there are an estimated 25,000 to 30,000 5-6 lenders in the country.
Taking them out of the system, he said, would result to big losses for the Filipino people, particularly to poor households.
“When you talk about poverty alleviation, in all due respect, these guys are helping the Philippines. That’s some P30 billion that you’re going to suck out of the system if you start arresting these people and the banks are not able to take their place,” Daryanani said.
In a move to kill the 5-6 money lending scheme in the country, the government recently launched Pondo sa Pagbabago at Pag-asenso Program, a micro financing program for small entrepreneurs.
“It is one of our goals to eliminate that brand (among Indians). It’s a tag that has a negative connotation,” Daryanani said.
“So the first direction is to legalize them. They first have to put up their own corporations, and they should be paying taxes. We want to formalize them and bring them to the system because not only are they helping the poor, government will benefit by collecting taxes from them,” he added.