DBP extends P500-M credit facility to SB Corp

The Development Bank of the Philippines (DBP) has extended a P500-million credit facility to the SB Corp. for relending to small and medium enterprises (SME) under the SME Unified Lending Opportunities for National Growth (Sulong) program.

SB Corp., formerly known as the Small Business Guarantee and Finance Corp. or SBGFC, is the result of a merger between Guarantee Fund for Small and Medium Enterprises (GFSME) and SBGFC. It remains under the wings of the Department of Trade and Industry (DTI).

The mandate of SB Corp. is to extend loans or loan guarantees to SMEs as well as develop alternative modes of financing.

As of end October, it has extended a total of P1.7 billion in direct loans or loan guarantees. Wholesale and retail lending reached P1.457 billion while guarantees amounted to over P200 million.

The P1.7 billion is actually P100 million over this year’s P1.6 billion full year target lending and guarantees prompting officials to look at new targets. In fact, the original target for the first 10 months was placed at P1.3 billion.

On the other hand, DBP is a government financial institution (GFI) with access to official development agency (ODA) funds for development projects for both government and private borrowing.

As of end September this year, it had a loan portfolio of P80.25 billion while total assets stood at P145.41 billion.

It has set aside P44.53 billion to support development projects and activities available through its wholesale and retail lending operations. More than 80 percent of its funds come from multilateral and bilateral institutions such as the World Bank, Japan Bank for International Cooperation, Asian Development Bank, and Kreditanstalt fur Weideraufbau (KfW) of Germany.

It maintains a balanced loan portfolio to small and medium enterprises (SMEs), and large, strategic industries such as transportation, power, among others.

In February this year, it formalized its commitment to the Sulong program and a loan package under the Industrial Support and Services Expansion Project (ISSEP) II loan portfolio.

ISSEP is a credit facility funded by the Japan Bank for International Corporation (JBIC) designed to finance the growth and expansion needs of priority SMEs. ISSEP II specifically provides credit plus business diagnostics and advice, business brokering (like franchiser and franchisees, supplier and buyer) training and other services to priority sub-sectors through organized industry groups.