SBCorp to release P.5 billion to fund SMEs in the Visayas

CEBU, Philippines – The Small Business Guarantee and Finance Corporation (SB Corp.), one of the government financial institutions, targets to release at least P.5 billion loans in the Visayas region before the end of the year.

SB Corporation manager for Visayas area office Cesar B. Antoni said that the agency has "a lot of money" to help the small and medium entrepreneurs (SMEs), including the micro enterprise players, but they have difficulties in finding the 'right" clients.

While the access to capital is one of the primary problems of the SMEs and the micro entrepreneurs now, Antoni said SB Corporation wants to release at least half-a-billion pesos for the Visayas this year.

As of September of this year, SB Corp. already released a total of P300 million in loans to its different partners, such as conduit banks, 34 cooperatives, and through its retail or direct financing program.

Although, the agency has a sizeable amount of money for lending to small businesses, Antoni said they also have to be cautious and screen the borrowers very well, in order to avoid loan wastage or overdue accounts.

"We also have the responsibility to manage the money well. We can just approve loans without going through proper and meticulous evaluation," he said in an interview.

SB Corp. has a total asset of P3 billion. In the Visayas operations, Antoni said its loan release performance in the first nine months of this year has increased by 100 percent.

"We slowed down last year, because of the global economic recession. Now, that the economy has shown recovery we are again back to our active marketing for the lending activities," Antoni said.

Based on the government's standard of SME category, a business operation which has a total asset of P100 million (including land asset) can already avail of the loan facility for SME, Antoni said.

In the Visayas, most of its clients are exporters in different sub-sectors, although there are also loan takers from other industries that are borrowing through its conduit banks and partner cooperatives.

Supposedly, SB Corporation's mandate is to delegate the releasing of the money for lending to different sectors, SME, micro, and retail or direct lending. But, at present, Antoni said the agency is releasing 50 percent of its total portfolio to wholesale loans to SMEs (conduit banks), 10 percent for its direct lending facility, and 40 percent is lent to the micro entrepreneurs through its partnercooperatives across the Visayan region.

Meanwhile, as the government, through the GFIs had been announcing the availability of loan assistance to the micro and small entrepreneurs, players are questioning its existence.

"We are still suffering from unavailability of funding support from the government. If there is any, micro or small entrepreneurs obviously can not avail of it because of high standard for requirements that can only be complied by medium to large companies, not the small businesses," said Alfred R. Awe vice chairman for Filipino Cebuano Business Club, a group of small and micro entrepreneurs in Metro Cebu.

The group suggested that the Magna Carta for MSMEs should be implemented seriously, so that legitimate players or the supposed target beneficiaries will be able to avail of the funding.

What happens now, he said is because small and micro businesses usually can not comply with the collateral requirement and other documentary processes needed by GFIs, most of them are forced to borrow from the underground loan sharks, wherein the releasing of funds can be outright. (FREEMAN)