Magna Carta mandates 98% loan allocation for MSMEs

CEBU, Philippines - Following the approval of the Magna Carta for Micro, Small and Medium Enterprises, the Bangko Sentral ng Pilipinas recently announced the provision of the eight percent allocation for loans intended for MSME businesses, which will soon be available in Cebu.

BSP Consultants for the Department of Loans and Credit Andres Rustia and Rosalinda Dumali-ang explained, to more than 20 groups in Cebu composed of cooperatives and MSME industry players, the process and provisions of the loan facility for to MSMEs.

The Magna Carta also involves the industrialization of the growth of MSMEs by complementing and supplementing financing programs for MSMEs with ease, devoid of the stringent collateral requirements that have hampered small entrepreneurs from complying and availing of the loan allocation.

With this, BSP gave the assurance that for MSMEs who might want to avail of a loan from the government and private banks authorized by BSP, would not be required of collaterals and the releasing of the loan shall be coursed through the cooperatives that the applicant MSME is a member of. This is through their credit surety fund, a new program of BSP that was already introduced in Cavite and Bohol.

Filipino Cebuano Business Club Inc. chairman Rey Calooy said that this development would be easier for MSME players and they are thankful for BSP for the approval of the loans without collaterals which would ease the burden of MSME players.

Calooy explained that this has always been their advocacy and they have always asked for the approval of the eight percent loan allocation solely for MSMEs. He said that prior to this, there has been a discrimination for MSMEs because some banks only lend money to those “bankable groups or businessmen.”

He said that those interested to venture in MSME are often discouraged to start their businesses because they do not have any means to even make a start as banks are not open to lend them money and they are also not capable of the collaterals required by the banks.

Calooy said that through this, more people would be able to have extra means of living and this would also help ease those who are still coping from the crisis.

He said that through the advisory of BSP, banks would be accepting applications from the cooperatives by November where six percent are allocated for micro and small enterprises and two percent are for the medium businesses. --- AJ de la Torre