MSMEs reiterate call for easy funding access

CEBU, Philippines - While the private sector is encouraged to sustain the health of the country’s economy, players in the micro, small and medium enterprises (MSMEs) are calling on the government once again to ease access to financing, both in government-owned institutions and banking sector.

Mandaue Chamber of Commerce and Industry (MCCI) board of trustee Glenn Anthony O. Soco, said that despite the swelling liquidity in the financial system today, the MSMEs sector is still having difficulties to access funds for expansion, because of discrimating requirements that discourage small and medium enterprenuers to expand their businesses.

“I hope that the government is true to its words that credit is widely available. Yes, we have excess liquidity, but the small and medium players should also be given opportunity to access the funds through credit,” Soco said.

Soco said the Philippines’ economy is supported by over 90 percent MSMEs, but the problem now is, only those big companies can easily access the excess funds from banks, and even from the GFIs (Government Financial Institutions), because only those large companies can produce the documents required by these financial institutions.

Access to financing has long been an over-due call from the MSMEs. Soco said now that the Philippines is facing a very fragile economic environment, which can be easily contaminated by the crises faced by economic giants, it has to boost its own private sector.

“Big business dont have problem, they can produce the requirements. How about the small businesses? Like the Sari-Sari stores? If we have excess funds, it has to be utilized that put it out in the system so cushion the economic fragility,’ said Soco, who also owns several businesses in retail, services, among others.

In a recent economic briefing conducted by economist Jonas Ravelas of the Banco de Oro Universal Bank, he said private sector should take advantage of the country’s excess liquity in the banking system, as there less loan takers due to uncertainty of the economy.

According to Ravelas, the business sector does not have confidence yet to borrow, as the world economy in general is still unstable.

Ravelas urged the traders to make good relationship with the banks in order to avail of credit for expansion of their respective businesses, saying it is now the time to take advantage of credit facilities in the banks because of low interest rates.

He however warned that the banking institutions are strictly upholding its “credit scoring” practice to avoid high deliquencies in the future.

On the other hand, Soco said banks should take a little risk to lend to the MSMEs, “how can they [MSMEs] achieve credit scoring if they dont have any track record yet?”

This is the time, that the government through the Bangko Sentral Ng Pilipinas (BSP) should intervene and strictly monitor the banks for its mandatory requirement to lend part of their loan portfolio to the small and medium enteprenuers.